Rebuilding Ukraine: investing in a time of war

Oleksandr Marchenko remembers the day that he left his home city of Bakhmut.

"It was 23rd February 2023. I was there when the Russian army had already entered the city," Mr Marchenko told RTÉ News, speaking through an interpreter at this week's Rebuild Ukraine expo in Warsaw.

"There were some moments when the distance between us and the Russians was 500 metres," he said, showing your reporter pictures of him in a flak jacket with the smouldering ruins of a Russian position in the background.

After weeks spent coordinating civilian efforts to defend Bakhmut, he managed to leave via the only road out of the city along with other civilians.

The last encircled Ukrainian forces withdrew from the rubble of Bakhmut in May last year before Russian soldiers raised their flag over a desolate landscape of destroyed buildings.

Not a single inhabitant from Bakhmut's pre-war population of 75,000 people remains in the charred ruins of the Russian-occupied city today. Its residents now live across Ukraine and beyond.

This week, Mr Marchenko, who is the deputy head of Bakhmut’s exiled administration, was attending the expo in Warsaw along with other members of the city’s former council team.

They were looking to raise an estimated €111m to build a new residential district for 3,000 former residents of Bakhmut in the west of Ukraine.

In an act of national solidarity, the village of Hoshcha, about 200km from the Polish border, has donated a large tract of land for the development. Demand from former Bakhmut residents for planned residential units is high.

The Bakhmut delegation was one of 17 Ukrainian communities to take part in the 4th edition of Rebuild Ukraine in the Polish capital, a gathering of more than 500 construction and engineering firms from around the world, as well as investors.

Officials from Kyiv and Lviv city councils presented big infrastructural projects but so too did the mayors of smaller communities.

Reconstructing damaged energy infrastructure and upgrading water management and waste systems were common proposals - projects that often cost north of €30m.

A number of council officials from central Ukraine spoke about the need to upgrade existing water and waste infrastructure because their populations have increased due to the arrival of internally displaced refugees, straining already aging infrastructure.

Smaller cities, like Poltava and Cherkasy were looking to attract more modest investments ranging from €1-€5m to construct rehabilitation centres for war veterans and facilities for children.

Slick video productions by different cities showcased green spaces and images of happy communities, followed by impassioned speeches by mayors and other officials. Solidarity exists between the cities, but they are also competing to attract foreign investment.

Lviv, for example, touts itself as a "safe city" in its promotional material, "located 720km from the nearest frontline".

For delegates from Trostyanets, a city of almost 30,000 inhabitants just 30km from the eastern front, pitching for investors is naturally much more difficult.

"Every night we hear the Shaheds," Yulia Olenchenko, a member of the Trostyanets delegations, told RTÉ News, referring to the Iranian-made drones that Russia fires at Ukrainian civilian and military structures alike.

Investment in community construction projects made up only part of the expo's activities.

Ukrainian government officials took part in panel discussions with high-level governmental delegations from EU member states, the US, Canada and the UK.

Senior representatives from Ukraine’s energy sector spelled out the huge task at hand of restoring the country’s critical infrastructure while green energy companies were well represented.

Ukraine’s energy ministry, a sponsor of the event, is keen to prioritise green energy projects in any reconstruction plans.

And it is those kind of big tenders from Ukraine's government and international aid agencies that attract keen interest from attending firms and investors.

"Our previous events differed from this event," said Liudmyla Denysiuk, Rebuild Ukraine’s International Relations Director.

"If before we spoke about how countries could help us with their aid, today we speak about how countries can invest in Ukraine," she said, adding that "investor attitudes are much better compared to last year".

Many Ukrainian delegates did not seem phased by the return of US President-elect Donald Trump to the White House in January. His re-election last week has cast doubt over the future of US military aid for Ukraine.

Mr Trump has said he will end the war in a day, a vague promise that sounds like Ukraine would have to effectively cede territory currently occupied by Russia in order to halt the fighting.

"It doesn't matter who will sit in the White House," said Andriy Pavliv, head of investments at Lviv city council.

"We need to be strong and we need to move forward anyway".

US government support for reconstruction investments, however, was on display.

The US International Development Finance Corporation, a governmental agency, announced at the expo that it will provide $50 million in "political risk insurance" to support companies in Ukraine.

The scheme will create a portfolio of war risk insurance policies for companies operating in Ukraine.

For the first time at a Rebuild Ukraine event, Enterprise Ireland ran a stall, in a bid to seek out potential opportunities for Irish companies in the Ukrainian market.

Kingspan is investing €280m in the construction of a manufacturing facility near Lviv in western Ukraine but few other Irish companies have entered the market so far.

CDGA Consultants, a Cork-based electrical engineering company, won a UN tender during the summer worth $250,000 to construct a power system at a UN scientific facility in Zhytomyr Oblast, about two hours west of Kyiv. The facility monitors missile test activity.

"We had to go into seriously iteratively detail with the relevant oblast council about what days we would be on site and that has been a challenge," said Dan Moriarty, managing director of CDGA, who was attending the expo in Warsaw.

Most of the existing engineering at the site was built during Soviet times, he said.

"We look at the distribution board and you can see a date stamp of 1977 on the fuses. Once one thing breaks, the whole system will go down".

CDGA engineers designed diesel generators to power the system, which are being constructed this month from material sourced in Ukraine.

The World Bank estimated last February that it could cost $486bn to rebuild Ukraine. After almost another year of Russian missile and drone attacks on civilian and critical public infrastructure, that estimate will be now be much higher.

It will be gargantuan task to provide new housing and infrastructure for Ukraine's cities, towns and displaced communities, but the post-war environment will no doubt attract investors who are willing to put big sums of money into Europe's biggest reconstruction project since the end of World War II.

This year's expo attracted a greater number of visitors than last year's event, according to organisers.

However, two questions were on many people's minds: when will the war end? And, of course, what would any ceasefire or peace deal mean for Ukraine's territory that is occupied by Russia?

Those questions may start to be answered next year as the new US administration is likely to push for talks between Russia and Ukraine.

And while the war continues, many projects closer to the frontlines will find it hard to attract funds.