Since the start of the war, Russia has inflicted severe damage on Ukraine’s energy infrastructure, leading to a critical need for comprehensive rebuilding efforts. As a result of the attacks, Ukraine has lost over 9 GW of electricity generating capacities, while local gas production has dropped 5–10 percent.
In a recent attack—and one of the largest—on Ukraine’s energy infrastructure, Russia targeted critical facilities, including the Kyiv Hydroelectric Power Plant, leading to emergency power cuts, as well as significant damage reported across 15 of Ukraine’s 24 oblasts.
International support and investment can help to not only restore but also modernize and secure Ukraine’s energy sector. Below, we explore the extent of the damage, the kinds of support provided and pledged by various international organizations, financial institutions and governments, and the investment opportunities available in the sector.
Repair and reconstruction of infrastructure
Ukraine’s energy infrastructure has seen more than half of its pre-war capacity destroyed. Reconstruction efforts are focused on restoring damaged infrastructure, including the construction of new substations and power transmission lines using modern and energy-efficient technologies. These efforts aim to not only restore but also improve the resilience and efficiency of the energy sector.
Support from international organizations and financial institutions
International organizations and financial institutions have been pivotal in mobilizing resources for Ukraine’s energy sector. The Ukraine Energy Support Fund, established by the EU’s Energy Community Secretariat, has raised over €500 million to support urgent repairs and maintenance of energy infrastructure. The World Bank has allocated US$200 million for immediate repairs, with potential additional funding up to US$300 million. During the Berlin Ukraine Recovery Conference in June of 2024, The European Bank for Reconstruction and Development (EBRD) signed an agreement for €300 million in emergency support for the energy sector to address the immediate energy crisis exacerbated by Russian attacks on Ukraine’s energy infrastructure, and in September 2024 the EBRD enabled more than €300 million in new lending by two Ukrainian banks for long-term energy security. Additionally, the International Renewable Energy Agency (IRENA) is collaborating with the Energy Community Secretariat to support sustainable energy initiatives.
Governmental support
Several governments as well as the European Union have stepped up to assist Ukraine in rebuilding its energy sector. In 2024, the EU committed €1.4 billion in guarantees and grants to help repair, rehabilitate, and develop Ukraine’s heavily damaged energy infrastructure. This initiative includes contributions towards renewable energy projects, like wind power and energy storage systems. The EU’s broader €50 billion Ukraine Facility will also support energy recovery, as part of a larger plan to help Ukraine resist aggression and transition towards sustainability. Additionally, the EU will help Ukraine secure 4.5 GW of generation capacity and provide an additional €160 million to get through the winter. This includes repairing 2.5 GW of capacity and exporting 2 GW of electricity to Ukraine, covering more than 25% of Ukraine’s energy needs for the coming winter. Ursula von der Leyen, the head of the European Commission, highlighted that the EU’s energy support includes three components: repair, connection, and stabilization. Of the €160 million, €100 million will come from revenue generated by Russia’s frozen assets in Europe, with funds allocated to repairing energy facilities damaged by Russian attacks and providing solar panels to 21 hospitals in Ukraine. The remaining €60 million will be provided as humanitarian aid.
The United States has provided over US$190 million through USAID’s SPARC project along with additional funding for economic recovery. Energy Security Project of USAID envisages US$244 million in support for the Ukrainian energy sector to be provided within seven years, in the form of procurement aid, grants and technical assistance. The US Department of Energy has also shipped high voltage electrical infrastructure components to Ukraine.
Japan has also pledged significant support for Ukraine’s energy sector during the war. Valued at approximately US$600 million, this assistance includes vital equipment like transformers, generators and solar panels, aimed at helping Ukraine repair damaged energy infrastructure. Japan’s aid package also prioritizes energy resilience, with around 40 percent of its total assistance focused on energy security.
Germany has pledged €30 million to enhance the reliability of Ukraine’s energy system.
Innovative solutions for continuous energy supply
To ensure continuous and uninterrupted energy supply, Ukraine is exploring various innovative solutions. There is a strong emphasis on developing renewable energy sources such as wind, solar and biomass, including biogas and biomethane. Decentralized energy generation is also being promoted to enhance resilience against attacks. Technological innovations include new space heating technology for heat pumps, innovative battery storage solutions, smart grids and geothermal energy harnessing. These solutions are crucial for building a sustainable and resilient energy sector.
Diversification of energy supply
Reducing dependence on imported energy is a key priority for Ukraine. Efforts are being made to diversify energy sources and improve energy efficiency. The Green Transition Law includes measures to align with the Energy Community’s legal framework for renewable energy. This law aims to create a more diverse and sustainable energy mix, reducing vulnerability to external shocks and enhancing energy security.
Investment opportunities
Of course, such a massive reconstruction effort presents numerous investment opportunities in Ukraine’s energy sector.
Ukraine’s Energy Strategy until 2050 outlines investment opportunities amounting to US$383 billion, with its focus on clean energy production and system resilience. Private sector involvement is being encouraged in renewable energy projects, smart grids and energy-efficient technologies. These investments are not only crucial for rebuilding the energy sector but also for transforming it into a modern, resilient and sustainable system.
The National Renewable Energy Action Plan to 2030 envisages an almost 10 percent increase in the total share of renewable energy in gross final energy consumption by 2030—from 17.3 percent in 2025 up to 27.1 percent by 2030. In order to achieve such an ambitious increase, the following investments will be required:
- US$11 billion for generating capacity
- US$1.4 billion for balancing capacities
- US$6.6 billion for heating production from renewables
- US$1.2 billion for increasing the share of renewables in the transportation sector
The Ukrainian government has already taken certain practical steps to attract such investments. In August 2024, the Ukrainian transmission system operator ran two auctions for long-term ancillary services contracts, to attain the construction of more than 1.1 GW of balancing capacity. By the end of 2024, it plans to run pilot auctions to distribute a quota of support for 110 MW of new renewable energy facilities. The Ukrainian government also launched a tender to build 700 MW of new high maneuverable generation.
Rebuilding Ukraine’s energy sector is a monumental task that requires significant international support and investment. The efforts to restore and modernize the energy infrastructure are crucial for ensuring a resilient and sustainable energy future for Ukraine. By focusing on renewable energy, grid modernization and energy security, Ukraine can emerge stronger and more resilient. The international community’s support and investment are vital in achieving this goal, providing both immediate relief and long-term benefits for Ukraine’s energy sector.
By Adam Mycyk and Maksym Sysoiev, Partners, Dentons
