Ukraine: the path to recovery and economic transformation - insights from the World Bank discussion in Vienna from DIM Group
On October 2-3, a strategic meeting of representatives of the World Bank, IFC, and international financial institutions dedicated to Ukraine's recovery took place in Vienna. The participants discussed key areas of reform, investment priorities, and mechanisms for attracting private capital to the reconstruction process.
DIM Group of Companies was represented at the forum in Vienna by Junior Partner Arseniy Nasikovskyy. He held a number of meetings with Austrian and European manufacturers, bank executives and IFC representatives and took part in a roundtable discussion on the investment future of development projects in Ukraine, calling on international investors to actively cooperate.
"Russia's invasion of Ukraine has led to widespread destruction and the disappearance of entire cities. More than 10% of the housing stock has been destroyed or damaged, and millions of people have been forced to leave their homes. This is not only a humanitarian challenge, but also a historic opportunity for Ukrainian developers. The reconstruction will require a huge amount of not only building materials, but also, above all, the experience of companies that will offer modern solutions for housing reconstruction, development of industrial and commercial enterprises, create new jobs and integrate the Ukrainian market into the European economic space," emphasized Arseniy Nasikovsky.
The World Bank estimates that direct losses from the war as of the end of 2024 exceed $176 billion, and the total reconstruction needs are approximately $524 billion, which is 2.8 times Ukraine's GDP.
The most affected are:
- residential sector - more than $57 billion (33%);
- transportation - $36 billion (21%);
- energy and mining - $20 billion (12%);
- commercial real estate and industry - $17 billion (10%);
- education and science - $13 billion (8%).
The international partners emphasized that the key principle is the "Build Back Better" approach, with a focus on energy efficiency, inclusiveness, and long-term sustainability. And Ukraine's recovery should be based on the following key structural reforms:
- updating the business environment and harmonizing regulations with the EU;
- stimulating trade and competition;
- attracting foreign and domestic investment;
- building a competitive, export-oriented economy;
- focusing on green and digital technologies, sustainability, and compliance with EU standards.
According to Arseniy Nasikovsky, the Ukrainian development market has a huge potential, but its realization requires a proactive position of players, attracting investments, searching for partners, transparency and compliance with international standards.
"DIM has already taken a step in this direction by attracting a strategic partner to implement existing and launch new landmark projects for the Ukrainian market with an area of more than 935 thousand m2 in the next 10 years. By the end of 2024, the company is one of the top 3 developers in Kyiv and ranks 7th in Ukraine in terms of housing commissioned. However, only transparent reporting, audit and implementation of ESG standards can open the door to the trust of international investors. We have experience of cooperation with CBRE - we were the first developer in the Ukrainian real estate market to conduct a construction audit, and by the end of the year we plan to be the first to conduct a financial audit. This is the only right way for Ukrainian developers to receive international investment," emphasized Arseniy Nasikovsky.
The forum paid special attention to the development of affordable housing. A roundtable organized with the participation of developers, investors and World Bank experts discussed the challenges and prospects of this segment.
According to the World Bank, 13% of Ukraine's housing stock is destroyed or damaged, which is more than 2.5 million households. The total housing deficit is up to 7 million apartments, of which 5-7 million are the consequences of the war, and about 1 million are additional demand due to internally displaced persons (more than 5 million officially registered).
Currently, experts estimate the sector's potential at about 90-170 million m2 of new housing over the next 10 years, which creates a powerful multiplier for the construction industry, employment and investment.
International partners have also emphasized the need to develop domestic production of key building materials such as cement, steel, glass, and insulation, which account for up to half of the reconstruction costs. This will reduce dependence on imports, reduce logistical risks and make the reconstruction process more sustainable.
IFC experts emphasized that Ukraine's reconstruction efforts could generate demand equivalent to more than 15% of the current global building materials market. This, in turn, opens up significant opportunities for Austrian and European companies, which, thanks to their innovations and sustainable practices, can play a leading role in the reconstruction process.
"We understand that rebuilding Ukraine is not just a matter of square meters. It is a matter of energy efficiency, environmental friendliness and a new quality of life. The Ukrainian market now needs innovations, partnerships, including with European companies, and localization of production. DIM Group strives to be among those who set this standard and offer solutions that will remain relevant for decades to come," emphasized Arseniy Nasikovsky.
