Pragmatically Integrating Sustainability Into the Reconstruction of Ukraine

This policy brief by the International Institute for Sustainable Development examines how to pragmatically integrate sustainability into Ukraine's reconstruction, focusing on energy efficiency in the residential sector. It draws lessons from post-war reconstruction in Bosnia and Herzegovina and post-disaster recovery in Croatia to suggest funding strategies for the EUR 50 billion Ukraine Facility.

• Ukraine has suffered direct infrastructure damage estimated at USD 155 billion and economic losses of USD 499 billion since the full-scale invasion. A 10-year reconstruction plan is estimated to cost over USD 486 billion.
• The reconstruction of Bosnia and Herzegovina serves as a cautionary example where a lack of local ownership and the exclusion of citizens and local experts from coordination led to inefficient aid flow, redundancies, and corruption. This resulted in the construction of homogeneous buildings that did not stimulate economic growth or preserve cultural heritage.
• Croatia's experience with the NextGenerationEU program highlights bottlenecks in green transition projects. Despite allocating 11% of its EUR 10 billion request to energy renovations for earthquake-damaged buildings, Croatia has made little progress in residential energy efficiency. This reflects a broader trend in the EU's Recovery and Resilience Facility (RRF) where grants have been used inefficiently, and only 10% of planned green transition objectives have been completed across member states.
• The EUR 50 billion Ukraine Facility aims to avoid previous mistakes by utilizing a comprehensive medium-term strategy (the Ukraine Plan) with multi-level governance and transparent design. It earmarks 20% of funds for municipalities and 20% of non-exclusive funds for the green transition, while requiring compliance with the “do no significant harm” principle.
• Ukraine's residential sector is severely damaged, with over 250,000 buildings affected and energy consumption 30% to 50% higher than the European average. The Ukraine Plan aims to introduce a nearly-zero energy buildings (nZEB) standard by Q2 2024.
• A cost-benefit analysis for the City of Bucha indicates that achieving nZEB for all buildings would cost EUR 318 million, compared to EUR 214 million for minimum Ukrainian standards and EUR 106 million for prior efficiency. While nZEB has higher upfront costs, large multi-story buildings are the most cost-efficient per square metre. Payback periods for nZEB vary from under 20 years with high energy prices to 34 years with low prices.
• To maximize sustainability, the author recommends a targeted funding strategy: using grant-backed loans for cost-effective multi-family homes and a mix of minimum and nZEB standards for single-family homes via low concessional loans. Grants should be reserved for infrastructure and electricity grid transformations rather than financially sound corporations.

APA

Soman, S. (2024). Pragmatically Integrating Sustainability Into the Reconstruction of Ukraine. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-06/integrating-sustainability-into-ukraine-reconstruction.pdf

Chicago

Soman, Samuel. Pragmatically Integrating Sustainability Into the Reconstruction of Ukraine. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-06/integrating-sustainability-into-ukraine-reconstruction.pdf.

Wikipedia

{{cite report |last1=Soman |first1=Samuel |title=Pragmatically Integrating Sustainability Into the Reconstruction of Ukraine |publisher=International Institute for Sustainable Development |date=June 2024 |url=https://www.iisd.org/system/files/2024-06/integrating-sustainability-into-ukraine-reconstruction.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{soman2024pragmatically, author = {Soman, Samuel}, title = {{Pragmatically Integrating Sustainability Into the Reconstruction of Ukraine}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = jun, url = {https://www.iisd.org/system/files/2024-06/integrating-sustainability-into-ukraine-reconstruction.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }