(Bloomberg) — President Volodymyr Zelenskiy emphasized the urgent need to rebuild Ukraine’s battered energy infrastructure at a conference in Berlin convened to mobilize international support for the reconstruction.
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The meeting, co-hosted by Zelenskiy and German Chancellor Olaf Scholz on Tuesday, brought together government officials, international organizations and business leaders and follows similar gatherings held last year in Lugano and London in 2022.
Russia resumed extensive attacks on Ukraine’s power grid last month, attacking energy facilities across the country. A major missile and drone attack on June 1 prompted authorities to further ration electricity supplies.
Zelenskiy accused Russian President Vladimir Putin of weaponizing energy and said about 80% of thermal power generation and a third of hydropower generation have been destroyed since the large-scale invasion began in February 2022.
He called for investments that would help restore as much as 1 gigawatt of capacity in the next three to four months of the 9 gigawatts he said were knocked out by the Russian attacks.
“We ask for equipment from non-operational stations and direct financial support,” Zelenskiy said. “We have already lost many times more generation than the consumption of major cities.”
Governments, executives and investors are already preparing for a reconstruction program in Ukraine that could amount to more than $1 trillion in public and private capital, according to estimates by the European Investment Bank.
Adjusted for inflation, this is more than five times the size of the American Marshall Plan, which financed the reconstruction of large parts of Europe after the Second World War.
One challenge will be to convince private companies to heed Zelenskiy’s call for immediate investment, as there is little sign of an end to the fighting and Russian airstrikes in the near term.
In his opening speech Tuesday, Scholz said private capital was key to rebuilding, adding that it “must also be a business case.”
“Those who get involved at an early stage, who are now cultivating and expanding their economic relations with Ukraine, will be at the forefront,” Scholz told delegates including European Commission President Ursula von der Leyen and outgoing Dutch Prime Minister Mark Rutte . “On behalf of the German industry I can say that they are doing this.”
Von der Leyen said the European Union has so far raised almost 500 million euros for urgent repairs to Ukraine’s energy grid and is also providing 1,000 additional power generators and almost 8,000 solar panels.
The bloc will also provide support for equity investments in Ukraine, she announced, adding that banks can apply for EU budget support under the program when investing in equity funds operating in the country.
“Our goal is to improve access to financing for Ukrainian companies,” she said. “Specially for SMEs and startups that can help modernize the Ukrainian economy” in sectors such as IT, renewable energy and critical raw materials.
Both Von der Leyen and Scholz reiterated their strong support for Ukraine’s eventual membership of the EU. The committee chairman said accession talks with the government in Kiev should start this month.
“A few months after the start of the Russian war, we jointly made a firm promise: Ukraine’s future lies in the EU,” Scholz said. “That still applies.”
Accession negotiations usually take years, because the path to membership is long and complicated. Croatia, the last country to join, saw the application process drag on for a decade before it was formally accepted in 2013.
–With help from Petra Sorge, Olesia Safronova, Aliaksandr Kudrytski and Jorge Valero.
(Updates with Zelenskiy, comments from von der Leyen starting in the fourth paragraph.)
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