From Capital to Capacity

Ukraine's reconstruction is not, in the first instance, a financing problem. It is a problem of converting capital into delivery — at scale, at acceptable risk, and at speed.

Alexander Romanishyn, Lyubomyr Kuziv, Vitaliy Goncharuk

A policy note after the Ukraine Symposium at Harvard Kennedy School

Harvard Kennedy School · 27 February 2026 — Panel 3, "Ukrainian-Led Recovery: Innovation, Digital Governance & Reconstruction". Co-author Alexander Romanishyn joining remotely on screen alongside the in-room panel.

About this panel — Ukrainian-Led Recovery: Innovation, Digital Governance & ReconstructionUkraine Symposium · Harvard Kennedy School · 27 February 2026

Moderator: Vitaliy Goncharuk — AI & technology strategist; Think Tank, ISE Group

Panelists:

1. Matteo Patrone — Vice President for Banking, EBRD — institutional investment & reconstruction finance
2. Oleksandr Romanishyn — Former Deputy Minister of Economy of Ukraine; Adviser, Ministry for Communities & Territories Development; Board Member, ISE Group
3. Marianna Bonechi — Co-Founder & Managing Partner, Dnipro VC — venture capital & startup ecosystem
4. Kseniia Semenova — Rector, National University "Kyiv Aviation Institute" (KAI) — higher education & human capital
5. Ilya Timtchenko — Strider Technologies; Founder, Ukraine Caucus at HKS — strategic intelligence & technology security

Symposium programme · HKS · Feb 27, 2026

Ukraine's reconstruction debate often starts from the question of how much money is needed. The updated Rapid Damage and Needs Assessment (RDNA5), prepared by the Government of Ukraine together with the World Bank Group, the European Commission, and the United Nations, shows that the challenge goes deeper. It is a capital absorption and project-delivery problem as much as a financing problem.

As of 31 December 2025, total recovery and reconstruction needs are estimated at $587.7 billion over the next decade, with direct damage exceeding $195 billion and around $15 billion identified for 2026 priority recovery spending. At least $20.3 billion in needs has already been met since 2022 through urgent repairs and early recovery — delivery is happening, but still far below the scale required.

The central question is how to convert public and private capital into a bankable pipeline of implementation-ready projects with risk contained to levels private investors can accept.

This requires stronger project preparation, disciplined and timely procurement, deeper insurance and guarantee markets, and trusted channels for private-sector participation.

02 · RDNA5 snapshot: where the markets are

RDNA5 makes clear that Ukraine is dealing with a portfolio of large, multi-year sectoral markets organised around four categories of need — Infrastructure, Social, Productive, and Cross-cutting. The full breakdown reveals both the depth and the granularity of demand.

Primary source: Ministry for Development of Communities and Territories of Ukraine · World Bank Group · European Commission · United Nations. Fifth Rapid Damage and Needs Assessment (RDNA5), February 2022 – December 2025.

Each category implies its own capital stack, risk profile, and delivery model. Infrastructure ($218.9 B) and energy require sovereign coordination and large-scale institutional finance. Social sectors ($201.2 B), led by housing at $89.8 B, require blended models that combine public subsidy, local lending, municipal execution, and private construction capacity. Productive sectors ($133.3 B) — commerce, industry, and agriculture — require working capital, equipment finance, insurance, and EU-aligned export integration. Cross-cutting needs ($34.4 B), led by explosive hazard management at $27.6 B, are the enabling layer: without demining and debris clearance, downstream construction and industrial activity cannot scale.

03 · Why absorption capacity is now the binding constraint

In several sectors, Ukraine can attract more capital than it can absorb efficiently. The main bottleneck is pipeline readiness: project design, technical documentation, permitting logic, procurement, contract packaging, and implementation management.

The Government of Ukraine and the World Bank have launched PREPARE Ukraine, a five-year $200 million program with an initial $44.3 million grant tranche, to finance project preparation and build institutional capacity so that state and municipal projects meet investor requirements faster. This is a clear signal that the problem lies in converting demand into implementation-ready, financeable projects rather than in headline capital commitments.

In practical terms, absorption capacity has four layers:

1. Project preparation capacity — the ability of ministries and municipalities to generate bankable projects at scale and speed.
2. Procurement and contract management capacity — the ability to commit funds transparently and on time.
3. Co-financing and risk-allocation capacity — the ability to structure projects so that public and private risk boundaries are clear.
4. Delivery oversight capacity — the ability of the state to monitor execution at scale and intervene early when projects stall.

When these four layers are weak, capital either stays on the sidelines or flows only through narrow donor windows. The institutional answer Ukraine is now operationalising is UR³ — a unified framework that converts international commitments into projects, pipelines, and partnerships under state-led delivery.

UR³ — Three Practical Pillars

UR³ unites emergency recovery, rebuilding, and long-term reconstruction into a single coordinated process — aligning planning, financing, and implementation under one state-led system.

1. Aligning Financial Instruments — public budgets, IFIs, donors and private capital; guarantees, grants, loans, equity and blended finance; risk-sharing mechanisms to unlock private investment.
2. Structuring Project Pipelines & Delivery — prioritised, standardised, Europe-aligned pipelines; clear delivery mechanisms from planning to implementation; transparency, monitoring and accountability at scale.
3. Activating Business Engagement — private sector as a delivery partner, not an afterthought; strong focus on diaspora businesses as trusted bridges; connecting capital, markets and projects on the ground.

The proposition: together, these pillars make recovery investable, scalable and executable — even under wartime conditions.

04 · De-risking: compressing the wartime risk premium

The policy task is to compress Ukraine's wartime risk premium to a level that mobilises private capital at scale. RDNA5 underlines that unlocking domestic and international private investment depends on reforms that improve the business environment, strengthen competition, expand access to finance, address labour constraints, and align production with EU green and digital standards.

The wartime cost of capital moves along three dimensions. All three have to move in parallel.

The Three Dimensions — compressing the wartime risk premium

1. Dimension I · Insurability — Guarantee facilities and reinsurance capacity that allow international and Ukrainian insurers to cover war-related risks on cargo, vehicles and rolling stock. €110 M — EBRD–Aon Recovery and Reconstruction Guarantee Facility, supporting >€1 B/year in cover.
2. Dimension II · Enforceability — War-risk political risk insurance covering operational assets — unlocking lender and investor appetite for static, on-the-ground capital expenditure. $50 M — DFC political risk insurance to ARX/AON facility, designed to unlock >$200 M in new coverage.
3. Dimension III · Visibility — Trusted diaspora business channels and transparent data that lower information asymmetry for U.S. and EU investors entering Ukrainian markets. 2,270 — verified Ukrainian-American firms acting as bridge investors and counterparties.

Institutional capital is already moving at a record pace. As Matteo Patrone (Vice President for Banking, EBRD) underlined at the HKS symposium, the EBRD has transitioned from emergency liquidity to structural reconstruction investment — with private-sector deployment now accounting for the majority of new commitments. The EBRD has deployed €9.2 B in Ukraine since 2022, including a record €2.9 B in 2025 alone, with nearly 60% in the private sector. The new Strategic and Capital Framework (2026–30) designates Ukraine as the EBRD's central strategic objective, targeting at least €3 B per year during reconstruction — channelled through vehicles such as the Amber Dragon Ukraine Infrastructure Fund (the first dedicated Ukraine infrastructure fund) and the Horizon Capital Catalyst Fund.

Guarantees and portfolio risk-sharing

Public guarantees remain one of the fastest instruments to move lenders in sectors with high loss severity and long timelines. EBRD's Ukraine Recovery and Reconstruction Guarantee Facility of €110 million, developed with Aon, provides reinsurance capacity so that international reinsurers and Ukrainian insurers can cover war-related risks on inland cargo, vehicles, and railway rolling stock. The facility is expected to support insurance cover for goods and vehicles in transit worth more than €1 billion per year by recycling capital over multiple short-term policies.

War-risk insurance

War-risk cover is a visible bottleneck for private investors. The U.S. International Development Finance Corporation (DFC) has committed $50 million in political risk insurance for a reinsurance facility provided to ARX, a Ukrainian subsidiary of Fairfax, with AON acting as broker. The facility is designed to create a portfolio of war-risk insurance policies for companies operating in Ukraine and to unlock more than $200 million in new coverage for static assets on land.

Banking system and local co-financing

Political risk insurance and guarantee schemes that free capital on Ukrainian banks' balance sheets allow banks to lend more to the real economy and co-finance reconstruction alongside international partners. This is essential for blended structures in housing, SME finance, and municipal infrastructure.

Diaspora-linked business channels

Diaspora businesses help reduce "trust friction". Ukrainian-origin firms in the United States operate under U.S. legal, banking, insurance, and compliance standards and can act as bridge investors, counterparties, suppliers, and validators for Ukraine-related projects. This lowers information asymmetry for U.S. and EU partners — a critical component of the wartime risk premium.

Ukraine Symposium · HKS — Panel 3 underscored a recurring point from policymakers and investors alike: Ukraine's reconstruction will be shaped by the architecture of delivery, not by the headline size of funding envelopes.

05 · Sector logic: technology deployment and labour shortages

The sector numbers in RDNA5 point to a technology deployment cycle layered on top of reconstruction. Transport, energy, housing, and industrial recovery are large enough to turn Ukraine into a real-world platform for:

1. Grid digitalisation, distributed energy, and smart-grid systems
2. Modular and prefabricated construction, new materials, and advanced building management
3. Industrial automation and robotics
4. Logistics platforms, sensors, and resilient supply-chain infrastructure
5. AI-based project monitoring and data-driven oversight
6. Dual-use manufacturing and advanced production systems

For investors, this creates a stream of technology-intensive demand across infrastructure, housing, industry, and services, rather than a series of one-off contracts. A housing market near $90 billion implies sustained demand for prefabrication, energy-efficiency systems, materials technology, and construction software. A transport market above $96 billion implies demand for logistics technology, rail modernisation, sensors, and corridor-level data platforms. An energy market near $91 billion implies demand for smart-grid systems, storage, backup generation, and distributed energy control.

AI for Recovery

Intelligent algorithms are becoming the foundation of faster, more precise and more transparent recovery, transforming RDNA5-scale data into actionable decisions for the state and its partners:

1. Analytics & Forecasting (where to spend, what to expect) — assessing recovery progress at community level, estimating financing needs, and identifying emerging risks before they compound.
2. Intelligent Delivery Management (catching deviations early) — monitoring project implementation, detecting deviations from plan, and supporting managerial decisions in real time.
3. Transparency & Integrity (procurement under a microscope) — analysing procurement, contract execution, and reporting data to surface anomalies and integrity risks for action.
4. AI for People (matching expertise to need) — supporting the allocation of recovery managers and experts based on experience, skills, and the priorities of each region.

Technology deployment has direct labour-market and migration implications. Millions of Ukrainians have left the country, and several sectors already face structural labour shortages. Embedding robotics, industrial automation, construction technologies, and digital public infrastructure into reconstruction is a way to compensate for reduced labour supply, increase value-added per worker, and keep more of the value chain inside Ukraine rather than offshoring production or services.

UNDP's summary of RDNA5 suggests that, under the right reform scenario, private capital could potentially cover up to 40 percent of Ukraine's recovery and reconstruction needs over the next decade. Even if realised volumes are lower, the implied private-finance opportunity comfortably exceeds $200 billion.

06 · A transatlantic channel: UA2USA and an emerging ecosystem

The first UA2USA research cycle created an empirical baseline for the Ukrainian-origin business footprint in the United States — a footprint that, taken in aggregate, is comparable in scale to a U.S. state economy.

Ukrainian-American business — a mature, scalable economic ecosystem

ISE Group · UA2USA Impact Study, 2025

1. ~45,000 — Ukrainian-founded firms in the U.S.
2. $55–58B — annual sales (≈ GDP of North Dakota)
3. ~300K — U.S. jobs supported
4. ~$24B — annual wages paid
5. ~$8–9B — annual taxes (payroll, income, sales)

Ukrainian-American businesses are a trusted strategic partner for Ukraine's recovery, reconstruction, and rebuilding.

Within that broader 45,000-firm network, ISE Group's Ukrainian-American Business Impact Study verifies 2,270 active Ukrainian-origin firms across all 50 states. This dataset serves as the working layer for capital mobilisation, procurement, policy engagement, and strategic partnerships.

The second stage of UA2USA research is designed as a market-making tool for Ukraine-related investment and trusted cross-border pipelines. The focus shifts from static mapping to a working architecture that:

1. Identifies firms that can act as suppliers, co-investors, local anchors, or distribution partners
2. Creates state- and sector-level visibility for U.S. institutions and investors
3. Links diaspora business capacity to reconstruction, export, and market-entry pathways for Ukrainian firms

In 2026, Nova Ukraine joins UA2USA as a core organisational partner alongside the Ukrainian American Chamber of Commerce and Industry and Selfreliance Federal Credit Union. Nova Ukraine has mobilised more than $180 million in humanitarian and recovery support since 2014 and reached millions of people through medical, infrastructure, education, and social projects. Together with UACCI and Selfreliance, this turns UA2USA from a one-time study into the nucleus of a broader ecosystem that connects data, finance, and policy.

Ukrainian-American businesses across all 50 states — make your state more visible. Ukrainian-American companies, Ukrainian firms entering the U.S. market, and partner institutions are invited to add their story to the map. Join the UA2USA Index →

07 · Policy conclusion

The next phase of Ukraine's recovery debate should move from "how much money is needed?" to "how quickly can Ukraine expand capital absorption at acceptable risk?" RDNA5 quantifies the market size. The real test for Ukraine and its partners is whether they can build:

1. Deeper project-preparation capacity
2. Faster and more reliable delivery systems
3. Scalable guarantee and insurance mechanisms
4. Trusted business channels that lower transaction costs and information frictions

The actors who will shape Ukraine's reconstruction are those who design and operate the architecture through which capital, technology, and expertise actually move — not those who limit themselves to announcing funding envelopes.

Sources

Atlantic Council. (2025). New study: Ukrainian-American businesses generate billions for US economy.

DFC. (2024). DFC commits $50 million in new political risk insurance to expand war insurance in Ukraine. U.S. International Development Finance Corporation.

EBRD. (2024). EBRD and Aon launch €110 million war risks insurance facility in Ukraine.

EBRD. (2026). Strategic and Capital Framework 2026–2030: Ukraine as central strategic objective.

Government of Ukraine, World Bank Group, European Commission, & United Nations. (2026). Ukraine — Fifth Rapid Damage and Needs Assessment (RDNA5), February 2022 – December 2025.

Harvard Kennedy School Ukraine Caucus. (2026). Ukraine Symposium — Panel 3: Ukrainian-Led Recovery: Innovation, Digital Governance & Reconstruction. 27 February 2026.

ISE Group. (2025). UA2USA: Ukrainian-American Business Impact Study.

Ministry for Development of Communities and Territories of Ukraine. (2026). UR³: A National Approach to Recovery under Wartime Conditions.

UNDP Ukraine. (2026). Updated Ukraine recovery and reconstruction needs assessment released.

World Bank. (2026). Updated Ukraine recovery and reconstruction needs assessment released (press release).

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