Ukraine’s finance minister says reconstruction costs are rising By Reuters

© Reuters. Local residents take things from their residential building destroyed by a Russian missile attack, as Russia’s attack on Ukraine continues, in the town of Vyshhorod, near Kyiv, Ukraine November 24, 2022. REUTERS /Gleb Garanich

By Mark Jones

LONDON (Reuters) – Ukraine’s Finance Minister Serhiy Marchenko said more Western aid was needed to help it meet its mounting reconstruction costs after Russian missile attacks escalated this week.

A series of Russian strikes in recent days have caused the biggest blackouts in Kyiv in the nine-month long war to date and shut down all of Ukraine’s nuclear power plants for the first time in 40 years.

In August, the World Bank estimated that it would take $105 billion to repair Ukraine’s physical infrastructure, but Marchenko told Reuters that figure would now rise.

“Unfortunately, this number is increasing every day and in the worst case scenario it will increase significantly,” he said in emailed comments.

Marchenko also said that the current Western support means “we will have around $3-3.5 billion a month compared to $5 billion this year.” This “should cover most of our funding needs during the year to run the government”.

However, he said the current budget only includes a very small amount for reconstruction costs which he needs to increase if possible.

Some senior European officials have estimated that it will likely cost more than a trillion euros to rebuild Ukraine when the war, which entered its 10th month on Thursday, finally ends.

For now, however, Western support continues.

The United States authorized an additional $400 million in military aid this week. In addition, G7 foreign ministers will discuss how to secure Ukraine’s energy supply when they meet next week, German Foreign Minister Annalena Baerbock tweeted on Thursday.

The International Monetary Fund said on Wednesday it had reached a tentative “staff-level” agreement for a policy program tracker. Ukraine hopes that this decision will lead to a full-fledged support program worth tens of billions of dollars.

“The support of our international partners is essential for us,” said Marchenko, also pointing to the 18 billion euros promised by the European Union.

Earlier this year, Ukraine had requested a $15-20 billion program from the IMF, but the Fund’s debt sustainability requirements prevented its approval. Instead, a $1.3 billion emergency deal was struck under the IMF’s new food and fuel crisis program.

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