UKRAINE Rapid Damage and Needs Assessment (RDNA2) - Key Findings
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OBJECTIVES AND LIMITATIONS The overall objective was to conduct a rapid yet consistent and robust assessment to inform reconstruction and recovery planning Difference with RDNA1 • Priorities for 2023 estimated • Exchange rate adjustment per July 2022 • One year of damage February 2022-2023 Limitations • Data availability or sensitivity of data • Sector-level not asset-level assessment • Damages sustained after Feb 24, 2023, are not included Julia Burlachenko
MACROECONOMIC AND POVERTY IMPACTS The war has taken a severe human, social, and economic toll • Gross Domestic Product (GDP) shrunk by 29.2 percent in 2022, and—with the continued duration of the war uncertain—is expected to grow by only 0.5 percent in 2023 • Tax revenue collection has deteriorated significantly, and public expenditure increased sharply to ensure delivery of key public services during war time • 8.1 million people are displaced across Europe (UNHCR, Feb 2023) • 5.4 million people were internally displaced within Ukraine with protracted (six months+) displacement prevalent (IOM, January 2023) • Poverty is expected to increase from 5.5 percent to 24.1 percent in 2022 (based on the poverty line of US$6.85 per person per day), pushing an additional 7.1 million people Julia Burlachenko into poverty and setting back 15 years of progress
OVERALL DAMAGE AND NEEDS D I R EC T Safe repair & reconstruction of DA M AG E buildings & infrastructure to R ECO N ST R U C T I O N A N D US$135 modern & green standards Support recovery of public R ECOV E RY N E E D S services & private sector billion US$411 billion Julia Burlachenko
$135 BN IN DAMAGE – MOST AFFECTED SECTORS TOTAL DAMAGE (US$ BILLION) • Significant damage to social and infrastructure sectors Environment and Finance and Foresty ; $2 • Housing represents 37 percent of total damage Banking $0 Housing $50 (US$50.4 billion), including more than 1.4 million Commerce and housing units affected; with over 1/3 destroyed of Industry $11 these beyond repair Education $4 Agriculture $9 • Transport represents 26 percent of total damage Health $2 US$35.7 billion), incl. 12 percent of transport damages Municipal Services… related to bridge infrastructure, and 19 percent of transport damage related to railway infrastructure and Water Supply and assets Sanitation $2 • Energy represents 8 percent of total damage (US$10.6 Telecommunications and Digital $2 Culture and Tourism $3 billion) with largest share of damage in the power sector (close to US$6.5 billion) – highest increase in damage since RDNA1 Transport $36 Energy and • Commerce and industry represents 8 percent of total Extractives $11 damage (US$10.9 billion), including both private and Source: RDNA2. Damage covers the period February 24, 2022, to February 24, 2023. publicly-owned enterprises
$135 BN IN DAMAGE – MOST AFFECTED REGIONS Damage < US$ 1 bn Damage US$ 1-5.9 bn Damage US$ 6-9.9 bn Damage > US$ 10 bn Regions with highest damage • Donetska • Kharkivska • Luhanska • Zaporizka • Khersonska • Kyivska
$411 BN IN RECOVERY & RECONSTRUCTION NEEDS TOTAL RECOVERY AND RECONSTRUCTION NEEDS (US$ BILLION) • Recovery and reconstruction estimates integrated green, Finance and resilient, and inclusive reconstruction measures and Irrigation and Water Management of Explosive Resource Management $9 Banking $7 Hazards $38 consider prevailing challenges with labor and material costs and “surge” pricing Commerce and Housing $69 Industry $23 • Transport makes up 22 percent of total needs (US$92.1 billion), subject to assumptions about the configuration of Education $11 Agriculture $30 Ukraine’s transport networks during reconstruction Municipal Services… Health $16 • Housing makes up 17 percent of total needs (US$68.6 billion) Water Supply and Sanitation $7 Social Protection and • Energy makes up 11 percent of total needs (US$47 billion) Livelihoods $42 • Social protection and livelihoods equals 10 percent of the Telecommunications and Digital $5 total needs (US$41.8 billion), including social benefits and Culture and Tourism services, payments to IDPs and the newly impoverished Transport $92 $7 Energy and • Explosive hazards management (humanitarian demining) Extractives $47 makes up 9 percent (US$37.6 billion), due to massive Source: RDNA2. Needs relate to total estimated needs covering the period 2023– urban, agricultural and forestry areas contaminated by 2033. land mines and explosive remnants of war
RDNA1 vs RDNA2 RESULTS SPATIAL EVOLUTION OF THE WAR BETWEEN FEBRUARY 2022 AND FEBRUARY 2023 • Damages have increased by 38 percent February 24, 2022 – May 31, 2022 June 1- August 31, 2022 • Needs have increased by 18 percent • The overall moderate increase in needs, albeit with major increases for specific sectors, reflects the trajectory of the war o High war intensity in early months o Control restored in some initially invaded September 1, 2022– November 30, 2022 December 1, 2022 – February 24, 2023 regions o Targeted attacks on critical infrastructure, with stalemate warfare in the eastern regions Other factors also include devaluation of the UAH and more precise estimates of land potentially contaminated with explosives Data source: Armed Conflict Location and Event Data Project (ACLED), processed by assessment team. Note: War events includes events categorized as battles and explosions/ remote violence by ACLED methodology; Hryvnia was devalued by the National Bank of Ukraine in July 2022. The adjusted exchange rate affected data for some sectors assessed under RDNA2.
GOVERNMENT PRIORITIES FOR 2023 Energy infrastructure • Restoration and repair of power transmission and distribution lines • Restoration and decentralization of energy generation • Strengthening the protection of the power grid Humanitarian demining (explosive hazard management) • Scaling up demining activities Housing • Repairs of flats and private housing Critical and social infrastructure • Renewal of basic housing utilities and digital infrastructure • Repairs and reconstruction of transport connections and ports • Repairs and restoration of social and administrative infrastructure Private sector • Guarantees, first loss facilities, lines of credit • Support to small and medium-sized enterprises and agricultural Oleksandr Kulik sector
US14 BN IN 2023 IMPLEMENTATION PRIORITIES • Out of US$14 billion, around US$9 billion in direct government • Meeting the 2023 priorities will require US$11 billion in financing expenditure will lay the groundwork for a safe, prioritized, beyond what the government has already addressed, including achievable, and efficient reconstruction and recovery. This will be US$6 billion for the state budget and US$5 billion in financing to complemented by investments by key SOEs and support to sustain support SOEs and catalyze the private sector. the private sector, including de-risking investment and trade. 2023 IMPLEMENTATION PRIORITIES PER GOVERNMENT PRIORITY SECTORS 2023 IMPLEMENTATION PRIORITIES PER TYPE OF FUNDING Private sector- Private sector: Government: Energy- core lines of credit, current Commerce and Non infrastructure ; guarantees, and expenditures; Industry; 2,1 Government- 2,1 insurance; $1,5 $1,5 Private sector- executed Agriculture; 0,6 Energy- payments to operators ; 1,2 Government- SOE investments; Critical and $2,1 executed Social… Humanitarian Demining ; 0,4 Payments to Critical and Social energy Government: Infrastructure- operators; $1,2 capital / project Utility Services ;… Housing ; 1,9 expenditures; $7,8 Critical and Social Infrastructure- Social & Admin ; Critical and Social 1,3 Infrastructure- Transport ; 3,5 Source: RDNA2. Sectoral definitions used in this figure are aligned with government priorities and do not match exactly with the structure of the RDNA2. Humanitarian demining refers to explosive hazard management in the RDNA2.
DAMAGE, NEEDS, AND 2023 PRIORITIES 3.5 B 1.9 B 1.3 B 0.5 B 2.1 B 0.4 B 0.6 B Source: RDNA2. Note: US$14bn reflects 2023 investments in government-prioritized sectors. Total 2023 implementation needs across all RDNA2 sectors is US$18 billion.
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