A tired Soviet-era office block in downtown Kyiv may not look like the most exciting place in the Ukrainian capital but inside it the future face of Ukraine is being moulded. It’s home to the Agency for Reconstruction and Development of Infrastructure, headed by former EuroMaidan revolutionary turned politician Mustafa Nayyem. He will be responsible for rebuilding Ukraine when the war comes to an end.

The reconstruction of Ukraine will be the biggest building project Europe has seen since the end of WWII. The devastation wreaked by Russia on Ukraine is catastrophic, but it also presents an unprecedented opportunity. Not since the great war has a country had to rebuild from the ground up and modernise the entire post-Soviet economy almost from scratch. Ukraine could potentially become one of the most modern and greenest countries in the world – if the money to pay for it can be found.

The former Deputy Minister of Infrastructure is in charge of leading the prodigious effort to rebuild and redesign Ukraine as well as interactions with donors to fund the immense costs of redevelopment, estimated in April to be $411bn by the World Bank in April. But as Nayyem points out, this figure is only going up, as Russia’s brutal invasion of Ukraine shows no sign of stopping.

“It is too early to estimate because we do not know what is going on in the occupied territories. It is obvious they will have [far] more problems than the de-occupied and liberated territories or the peace side,” Nayyem tells bne IntelliNews in an exclusive interview.

Pointing to Kherson as an example, Nayyem explains that Russian troops have destroyed everything in the occupied zones, including municipal transportation, bridges, roads and administrative buildings. All will have to be rebuilt, likely from scratch. Repairing damaged roads and bridges is one of the Agency’s key priorities and crucial for the delivery of goods, ammunition and aid to soldiers on the front line and civilians living in affected territories.

In addition, the Agency is focusing on energy infrastructure in preparation for the heating season as well as utilities, such as water. Following the destruction of the Kakhovka hydroelectric power plant (HPP) last month, the Agency is building a pipeline to provide water to 1.5mn people in southern Ukraine.

Accommodation is another major issue. 8.6% of Ukraine’s total housing stock is damaged or destroyed, amounting to $54bn in damages, according to a June report from the Kyiv School of Economics (KSE). The Agency has received over 400,000 inquiries from liberated territories, 40% of which concern housing.

“For us, it's important now to hear what the regions need and to help them to cover this gap in financing or expertise,” Nayyem says.

Reconstruction is now at the forefront of discussions about Ukraine and Nayyem wears a look of exhaustion from working non-stop since the creation of the Agency in January. Nevertheless, optimism shines through as he explains that Ukraine will have no problem with funding the process.

“There are a huge number of partners who want to help, and they are now defining the process of delivering this money. I think this year will be the first to have a big amount of money,” he says.

Currently funding from allies and institutions is simply filling the holes in the state budget, whilst the Ukrainian government is in the process of restructuring loans from institutions. But the Agency has small projects with the UK, World Bank, European Investment Bank and the European Bank for Reconstruction and Development (EBRD) for rebuilding, although not at the level that Ukraine needs. Additionally, countries like Poland, Lithuania and Estonia are implementing their own projects on the ground, with Warsaw funding temporary accommodation for IDPs in the de-occupied towns outside Kyiv.

Ukraine also launched the Fund for Liquidation of the Consequences of Russian Aggression in January 2023, which consists of seized funds and assets belonging to the Russian Federation and Russian citizens which will be used in the reconstruction process. The 2023 state budget allotted UAH35.5bn ($965mn) to the fund, with priority on rebuilding destroyed housing and critical infrastructure facilities, and the government confiscated $462mn from Russian banks at the start of the year.

“Regarding all support of our partners, we understand that we will not have problems with financing. The problem for all of us is to do it as fast as possible,” Nayyem explains.

Bureaucracy is holding back the delivery of urgent funding and Nayyem believes the process needs to be better co-ordinated to urgently help those in need. One of the ways to speed up the flow of money is through partnerships with the private sector, with Ukraine offering attractive opportunities. The government is currently in the process of creating insurance for hesitant companies concerned about the war and the Agency has signed several non-disclosure agreements with enterprises who have expressed interest in public-private partnerships.

The private sector was pinpointed at the Ukraine Recovery Conference in London last month. However, many expressed concerns about Ukraine’s corrupt reputation. Kyiv has taken this to heart and Nayyem points to the recently launched DREAM platform, which aims to make the reconstruction process as transparent as possible.

“DREAM collects, organises and publishes open data across all stages of reconstruction projects in real time, implementing the highest standards of transparency and accountability. Anyone, anywhere, can monitor the effectiveness and efficiency of project delivery, and use these insights to mitigate risks, conduct accurate reporting and improve overall project performance,” the website states.

Nayyem believes implementing transparency and corruption prevention measures in all agencies will help change the approach for procurement and other issues and build trust with partners. However, unlike many Ukrainian citizens, he doesn’t believe in implementing harsher punishments for guilty parties.

“Punishment is when everything has happened, when you cannot bring back money in time. So, the main tool should be prevention and deterrence,” he said.

However, a recent report from Transparency International found that 24% of Ukrainian citizens and 18% of Ukrainian businesses were in favour of increasing criminal liability for corruption. The overwhelming majority of Ukrainian citizens and businesses (73% and 80% respectively) listed the resumption of corruption schemes as their top fear post-war. But Nayyem is confident that the government will tackle these issues head-on as part of Ukraine’s rebranding.

Build back better

The physical reconstruction process will begin in August with the experimental “build back better” project. It will be trialled in six settlements in the Kherson, Kyiv, Sumy, Kharkiv and Chernihiv regions, which should become fully habitable within a year, according to Nayyem.

Currently, only Ukrainian construction firms are involved in the rebuilding process due to fears of foreign companies over hostilities. Nevertheless, Nayyem welcomes international companies to register in Ukraine in order to make the market more competitive and ensure the highest quality.

“But everything should be done in Ukraine. It's very important, because Ukraine has its own big capacity to produce materials and enough experts and specialists and labour who can work on this project,” he stresses.

Reconstruction will play a crucial role in boosting Ukraine's depleted workforce, which has suffered a 30% drop since the start of Russia’s full-scale invasion. The Agency is ready to offer construction jobs to soldiers returning from the war as well as returning refugees.

“It will be one of the biggest triggers for the economy next year,” Nayyem states.

He excitedly explains the project as not about building back Soviet-style, but about building unique and “people friendly” settlements for different communities’ needs and requirements. Nayyem and his team have planned a visit to Posad Pokrovske in Kherson Oblast the day after the interview where the proposals will be presented to residents. “Even the renders look beautiful,” he claims.

It’s a radical project that will be unlike anything the country has seen before and in stark contrast to Russia’s reconstruction projects in Mariupol, which Nayyem dismisses as a “ghetto”. Citizens have a direct say in how their settlements will look and 2,000 members of the Agency are in communication with locals on the ground. Whilst the Agency discusses the project’s needs with the government and the Ministries of Energy, Infrastructure, Education and Healthcare, the final decision is up to local authorities and residents.

“We can't dictate to them,” Nayyem said. “Of course, we will suggest to people the best solution, because in some areas we understand that infrastructure is overloaded. In some facilities in some areas, there is not the possibility to rebuild everything as before the war and it's not necessary.”

Healthcare institutions, for example, should be diminished in amount but increased in capacity to deliver different services, he claims. At the same time, "safety centres" will be modernised to combine police, firefighters and ambulances to work more efficiently and also reduce electricity usage. Nayyem explains that facilities will also be fully accessible for disabled people, an urgent need for Ukraine considering the high number of injured fighters returning from the front line.

A standardised approach and modern technologies are being implemented in the rebuilding process, with plans for the first 3D printed school in Europe to open in Lviv next year. Prefab and modern materials for housing will help speed up the process and keep costs down as well as provide work for production factories. Modernisation also means green designs and the Agency is in discussion with European colleagues, international communities and experts to adopt environmental standards.

“In the future, to attract more money and involve partners, we should be green. It's important,” Nayyem emphasises.

However, one of the main problems is the lack of residents in territories close to hostilities, as many have left the country or moved to other cities. In order to bring people back, the government needs to offer opportunities and stability, as well as rebuild key infrastructure. Nayyem references examples of recovery processes after catastrophes in Japan, the USA, Pakistan and Malaysia as a blueprint for what needs to be done.

“First of all, people think about security; if it’s secure they will come back. Secondly, it's to survive and earn money and they should have jobs. We should be focused on the economic side of this issue, and I think restoration itself will be part of economic development and part of job creation. Next is housing, which is the responsibility of the government, because housing is something that people cannot bring back fast enough [themselves] so the government should help them,” he explains.

Once these issues have been addressed, then he is convinced people will return to their home towns. Despite the challenges facing the Agency, Nayyem is confident and describes the project with pride. For him, it’s not just about rebuilding war-torn villages and cities, it’s about a revolutionary change, directing Ukraine away from its Soviet past and building a modern, exciting future that is designed to take into account the needs of different communities.

“It's a very different approach to make this research: speaking to people, doing all these polls, showing these projects at public hearings, community gatherings and discussing these issues. That's a big part of our work,” Nayyem states.

“I think that we will really show how it will be done and this final project for us is crucial.”