In November 2024, the REBUILD UKRAINE conference took place in Warsaw. It focused mainly on Ukrainian energy and water projects. Ministers of Ukraine, Poland as well as many Scandinavian and Baltic countries were present. International organizations such as the EC, EBRD, Deutsche Bank, UNDP, Nefco, IDFC, and IFC participated in different discussion panels. This was the case also for many high-level representatives from Ukrainian ministries and state organizations. More than 500 companies stood at the exhibition, which took place in parallel with the conference. Representatives of the American State Department made the trip from Washington to sign an agreement about the extraction of rare earth minerals, present on Ukrainian territory. Such events may look premature and useless to most ordinary Ukrainian citizens, who live presently with frequent power interruptions and under frequent bombings. They may also look surrealistic when the future of Ukraine as a sovereign country might presently even be compromised. However a closer look at the information communicated in Warsaw shows that this is not the case.
The EBRD demonstrates that some financial institutions keep investing in Ukraine despite the war. They finance Ukrenergo and Ukrhydroenergo, which both need funds urgently to repair damages due to bombings. With credits of 180 million Euros, it also assists Ukrzaliznitsia in its effort to install 250 Mw of decentralized production facilities, so that the railway would benefit from a decentralized and autonomous power supply. NEFCO, a similar but smaller organization, is involved in the financing of 50 smaller projects, such as the reconstruction of destroyed schools, housing, and other facilities. Not only concentrating on urgent priorities, the EBRD prepares also the future by financing already now the construction of at least 750 Mw of green energy projects. They are likely to provide a replacement for some of the destroyed thermal power plants. It participates also to the construction of a methanol plant by a private Ukrainian company. These many organizations play therefore a concrete and important role in the survival of Ukraine. It is certainly useful to provide an opportunity for such organizations to coordinate their activities in a safe location.
The above-described activities are crucial and significant. But other more important energy projects are being prepared already now, which were not openly discussed in Warsaw. An example is the willingness by the American multinational company Westinghouse, to invest in the Khmelnitskii nuclear power plant. They plan to finalize the construction of two partly built blocs (2000 Mw), which had been designed in Soviet times. They even poured symbolically concrete on this site. They express also their readiness to build two entirely new blocs (also 2000Mw). This can be considered as an extension of a previous project called Energy Bridge to Europe. Following initiatives by Ukrainian activists, Westinghouse and EDF had committed years ago to invest 500 million dollars in the reactivation of very high voltage power transmission lines (3000 Mw) linking the Khmelnytskyi power plant to the Polish networks. For undisclosed reasons, this project was canceled by present central Kyiv authorities. It is only because of the war that this link to Europe was urgently but only partly established in 2023 at a cost of $10 million. It operates presently at a partial capacity of 1000 Mw. Nonspecialists should retain from this that a possibility exists today to exchange large additional amounts of power with Europe. This was used during the summer of 2024 when severe power deficits were experienced for months in Ukraine. At term, such project will open the perspective to export significant amounts of Ukrainian power to Europe.
It is less noticed that this project can be enlarged but including a very large pump storage power plant. It is present at a small distance from the above power plant and its construction was never finalized. Its importance does not seem to be sufficiently understood. When it will be fully built and reach its nominal capacity of 3000 Mw, it will be one of the most powerful in the world. The purpose of such plants is to accumulate energy. They will be extremely useful in the future when a larger proportion of the power supply will be generated from wind and solar energies. The plant was designed in Soviet times when environmental issues were not a priority. Western experts should be involved to try to minimize the ecological impact of such a major facility and to propose how its connection to Ukrainian and European power networks should optimally be improved. Finalizing the construction of this plant and its connections according to contemporary requirements will not only help solidly integrate the Ukrainian and European power networks. It can also facilitate significantly the transition to green energy not only Ukraine but also in part of Eastern Europe. Rebuilding Ukraine will not necessarily mean the reconstruction of Soviet facilities. It also means imagining a new modern Ukraine, with a transition to contemporary energy sources.
Local experts had pretended that it would require years and a billion dollars to synchronize to Ukrainian and European power networks so that power exchanges could be possible. Only a few weeks were finally necessary to achieve this, after the beginning of the war. Similarly, the reactivation of the Khmelnytskyi power line took only three months. This raises the question of the objectivity of the decision-making process in Kyiv. The above-mentioned company Westinghouse is presently also supplying Western nuclear fuel to Ukrainian power plants. It had to lobby for years against local specialists, who pretended categorically that Western fuel could be used in Soviet-designed nuclear power plants.
They became the main suppliers of such fuel in Ukraine, reducing by significantly the scope of Russian influence. It can therefore be suspected from the recent history of the Ukrainian energy sector that many politicians and so-called experts were and maybe are still influenced by foreign powers, or that their objective is to protect the monopolies of some oligarchs. Such people should be removed from future reconstruction programs. Only sufficiently competent and “patriotic” participants should be involved. A vast program should also be undertaken to eliminate a large part of the useless administrative and bureaucratic burden, weighing on every project. This is not a technical issue anymore, and this should be dealt with by Western governments. Reconstruction programs will be efficient and useful only if significant structural changes take place in Ukraine. Work on the level of the technical characteristics of projects, or negotiations about their financing may not be sufficient
Decision makers at the Ukrainian Parliament, ministries, and national companies are presently extremely busy, facing urgent priorities and keeping the country afloat. Most local competent specialists are also overloaded and are active in repair works. It was interesting to notice in Warsaw that many countries had nominated what they called “special envoys”, advisers, representatives, or “energy attaches for the reconstruction of Ukraine”. These representatives should unite their efforts and approach their government, to obtain grants for what is commonly called “Technical Assistance” activities. This funding could be used to finance some local and many foreign specialists. They could be involved in the reconstruction of Ukraine in activities which would include some technical design of projects, their approval by local instances as well as the preparation of the set of documents to be presented at large financial institutions.
However, the reliance on the large multinational financial institutions will probably only be a first step in the Ukrainian reconstruction. Most of the future investments will probably be made by private multinational companies. Independent consultants should therefore also lobby the Ukrainian government in favor of improvements in the Ukrainian administrative, legislative, and fiscal environments. Ukraine should be sufficiently attractive to private investors, particularly in power storage and natural gas production. It should also be made sure that contrary to past approaches, projects would benefit the Ukrainian population. The generated profits should be fairly distributed at the national, regional, and local levels, and not end up in a few offshore accounts. Experience shows that even very positive projects could face significant opposition. The involved lobbying work would be considerable. Political pressure will inevitably have to be exerted also by foreign embassies and governments. It takes years to implement such long-term programs.
Therefore it makes sense to start working on them already now, even if this looks overly optimistic in the present geopolitical environment. One of the most important results of these efforts will be that Ukraine will be perceived not only as a country requesting permanent military and humanitarian assistance. It will be understood that it is also a country offering significant economic opportunities.
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