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Newsletter #29 Reconstruction Ukraine - November 2025

November has been one of the toughest months for Ukraine since the full-scale invasion began. The country faced new attacks on civilian and critical infrastructure, ongoing pressure on the front lines, widespread electricity outages, and pressure related to peace negotiations.

Additionally, the exposure of a large-scale corruption scheme revealed serious vulnerabilities, yet it also demonstrated Ukraine’s determination to confront them through transparency, accountability, and continued institutional reform.

Amid these challenges, Ukraine’s internal unity and strong alignment with key international partners remain essential. In this edition:

• Macro-economic overview of Ukraine at the end of 2025
   
• Rebuild Ukraine 2025 results
   
• New agreements under Ukraine-France cooperation
   
• Recent financing from EBRD, IFC, and European partners
   
• Investments in decentralized energy generation and a modern float glass production facility

We hope you enjoy this edition and find it insightful!

Ukraine Reconstruction: Key Figures

• Macroeconomy

In 2025, Ukraine’s economy continues to demonstrate remarkable resilience despite the profound challenges of the ongoing war. Economic growth has moderated this year, weighed down by intensified attacks on critical energy infrastructure, a weaker harvest, and persistent labour shortages. Nevertheless, the medium-term outlook remains positive, with economic performance forecast to improve steadily through 2027.

Current economic developments (2025)

• Real GDP growth is forecast at 1.6% in 2025.

• Inflation slowed to 10.9% in October 2025 according to National Bank of Ukraine, with further deceleration expected by the end of the year. European Economic Forecast expects inflation to peak at 13.1% in 2025

• External financing amounted to USD 13 billion between August and October 2025.

• International reserves reached USD 49.5 billion as of 1 November 2025, increasing by 6.4% in October and marking the highest level in Ukraine’s history.

• The unemployment rate stands at 13.3%, reflecting persistent labour market pressures.

• The general government deficit is estimated at 23.8% of GDP in 2025, driven primarily by war-related expenditures despite strong tax revenue performance.

Forecast for 2026–2027

Despite ongoing challenges, Ukraine’s economic outlook is expected to improve over the next two years:

• GDP growth is projected at 1.5% in 2026, constrained by continued security risks. In 2027, growth is forecast to accelerate significantly to 4.7%, assuming conditions for large-scale reconstruction are in place.
   
• Inflation is expected to gradually ease to 9.8% in 2026 and 8.8% in 2027.
   
• The fiscal deficit is projected to narrow to 21.2% of GDP in 2026. In 2027, stronger economic activity, improved tax administration, and a gradual moderation in defence spending are expected to reduce the deficit further to 14.4% of GDP.

Despite facing extraordinary wartime challenges, Ukraine’s economy continues to demonstrate resilience supported by strong international assistance.

Source: Autumn 2025 European Economic Forecast, National Bank of Ukraine

Key developments for Ukraine’s Reconstruction

• Diia.AI becomes first national AI assistant for public services

Ukraine has become the first country in the world to launch a national AI assistant for public services. Diia.AI is the first AI system globally to provide citizens with government services at a national level via an online platform. The record was officially recognized during the WINWIN Summit in Kyiv on 4 November 2025.

Capabilities of Diia.AI

• Delivering services via chat: for example, instantly issuing an income certificate with a single message.

• Providing guidance on all Diia services: from registering a sole proprietorship (FOP) to applying for the “Baby Package.”

• Personalized service recommendations: assists with programs like eVidnovlennia and suggests relevant services based on the user’s situation.

Diia.AI, officially launched in September 2025, is already helping citizens access government services quickly, efficiently, and conveniently online.

Source: Ministry of Digital Transformation of Ukraine, Forbes.ua

Rebuild Ukraine 2025

• Rebuild Ukraine 2025

On 13 November, Warsaw hosted the 5th international exhibition and conferenceReBuild Ukraine: Construction & Energy 2025. This international event brought together public institutions, Ukrainian municipalities, companies, and investors committed to supporting the country’s reconstruction.

As the leading European platform for advancing Ukraine’s recovery projects, the forum gathered:

• over 6,000 participants,

• 762 companies,

• representatives from 33 countries,

• and 160 Ukrainian communities.

Discussions focused on reconstruction, public–private partnerships, and investment opportunities.

CCIFU and its members participated in the exhibition for the third time. The event served as an important exchange platform within the broader reconstruction effort. For CCIFU, it was an opportunity to meet many French companies that remain highly motivated to invest in Ukraine and take part in reconstruction projects.

Source: CCIFU, Rebuild Ukraine 2025, Ministry of Economy of Ukraine

France-Ukraine Cooperation

France and Ukraine continue to expand cooperation across multiple sectors. On 17 November, President Volodymyr Zelenskyy visited France, resulting in a series of key agreements, including the development of a new combat aircraft fleet for the Ukrainian Air Force. Under the deal, France will supply 100 Rafale jets, significantly boosting Ukraine’s defense capabilities. Beyond defense, collaboration on major infrastructure projects is also advancing.

• Alstom will deliver 55 electric locomotives to Ukrainian Railways

Alstom and Ukrainian Railways have announced an agreement to supply 55 Traxx locomotives.

Project details

The contract will be financed primarily by:

• 300 millioneuro from the European Bank for Reconstruction and Development

• 190 milliondollars from the World Bank.

The locomotives will be designed and manufactured at Alstom’s Belfort site, France. The delivery will begin in 2027. The contract price also includes training for train drivers, maintenance personnel and some deliveries of parts.

Operational benefits

The 55 new electric locomotives will effectively replace around 80 older units, currently in operation, leading to an operational cost reduction of over 30%.

The new dual-system locomotives will be capable of traveling directly from major cargo hubs to ports. Currently, many routes require changing locomotives, which causes significant delays.

Source: Alstom,Ministry for Development of Communities and Territories of Ukraine, Embassy of Ukraine to the French Republic

International Benchmark

• IFC and EBRD commit $50 million to the Rebuild Ukraine Fund

The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have jointly committed $50 million to the Rebuild Ukraine Fund, a new private equity fund managed by Dragon Capital.

Strategic investments

The EBRD and IFC’s anchor investments of $25 million each (€21.8 million equivalent) will help the fund to achieve a viable first close, and will additionally send a strong signal to the market highlighting the importance of investing in the country.

Fund objectives

The Rebuild Ukraine Fund aims to raise $250 million in total capital. Its mission is to provide long-term equity and quasi-equity financing to Ukrainian SMEs and mid-cap companies.  The fund will focus on industries essential to Ukraine’s stability and recovery, including:

• Consumer retail and services
• Healthcare
• Financial services
• Construction materials
• Agriculture and agri-related sectors

By supporting the continued development of one of Ukraine’s most established domestic fund managers, the EBRD and IFC are playing a key role in strengthening the private equity asset class in Ukraine.

Source: EBRD, IFC

• EIB provides €100 million to strengthen economic resilience and heating infrastructure in Ukraine

The European Investment Bank (EIB), the bank of the European Union, has disbursed a total of €100 million to support economic resilience and critical municipal heating infrastructure in Ukraine.

€70 million to support Ukrainian businesses

€70 million has been disbursed to Ukrgasbank under the €400 million Ukraine Economic Resilience Facility Lending Envelope.

The financing will :

• expand access to long-term loans for micro, small and medium-sized enterprises (MSMEs) and mid-caps

• sustain employment and support the resilience of Ukraine’s private sector

• contribute to Ukraine’s green transition by supporting investments that reduce greenhouse gas emissions and improve energy efficiency.

€30 million to restore and strengthen municipal district heating

€30 million has been disbursed (€15 million to Ukrgasbank and €15 million to Ukreximbank) as the first tranches of larger EIB district heating loans (€50 million and €100 million, respectively), guaranteed under the European Commission’s Ukraine Investment Framework.

The financing will be on-lent to communities and public utilities to:

• repair and upgrade district heating systems

• improve energy efficiency in public buildings

• deploy renewable energy solutions

• enable the timely reconstruction of facilities damaged by Russia’s attacks

These investments will help municipalities enhance energy security and reduce reliance on vulnerable centralised systems, ensuring more reliable heating for schools, hospitals and residential communities.

Source: EIB

• EU announces over €200 million in grant financing to support Ukraine

The European Investment Bank (EIB), in cooperation with the European Commission and the government of Ukraine, announced more than €200 million in new EU grant financing.

Support for water and housing projects

A total of €75 million in EU grants will support the Ministry for Development of Communities and Territories of Ukraine in implementing EIB-financed reconstruction projects.

Breakdown of the support:

• €25 million to complement the ongoing EIB loan for water recovery to improve access to clean drinking water and modern wastewater treatment across the country.

• €50 million will support the EIB-approved social housing reconstruction loan to develop a sustainable model and financing the construction of publicly owned social and affordable rental housing, particularly in communities hosting displaced people.

In addition, a €127 million EU grant to Naftogaz Ukraine will complement the €300 million EIB loan signed in October. This will help secure strategic long-term gas reserves and strengthen the resilience of Ukraine’s energy system.

Source: EIB

• Team Europe launches €37 million EU4Reconstruction initiative to support Ukraine’s reconstruction

On 12 November, the European Union (EU), together with Denmark, Germany, France and Lithuania, launched EU4Reconstruction — a €37 million Team Europe initiative designed to improve governance, transparency and accountability in Ukraine’s reconstruction and ensure that public investments meet EU standards.

Key objectives 

Over the next three years, the programme will:

• strengthen Ukraine’s national reconstruction governance and regulatory framework; 

• help municipalities plan, finance and deliver infrastructure projects to EU standards;

• support the State Agency for Restoration and Infrastructure Development and its ecosystem in effectively managing large public investments;

• expand the role of citizens, civil society and media in monitoring reconstruction. 

Implementation partners

EU4Reconstruction, with a budget of 37 million euros, will work with key ministries, theAgency for Restoration, as well as dozens of communities across Ukraine.

Source: EEAS, Ministry for Development of Communities and Territories of Ukraine

Focus on the private sector

• Power One and EBRD sign €22.3 million loan agreement to develop decentralized generation in Ukraine

Power One, part of the Dragon Capital group, has signed a €22.3 million loan agreement with the European Bank for Reconstruction and Development (EBRD) to construct 68 MW of decentralized generation capacity in Ukraine’s Zakarpattia region. The initiative has also received €3 million in grant financing from the EBRD Crisis Response Special Fund, supported by the Government of Norway.

Project overview

The project will deploy:

• 36.8 MW of gas engine units

• 31.5 MW of energy storage systems

This will be Ukraine’s first large-scale facility to integrate gas generation and battery storage into a single system, enhancing both grid stability and operational flexibility.

The project will contribute to reducing energy dependence, strengthening local energy infrastructure and ensuring reliable electricity supply for businesses and critical services

Source: Dragon Capital, EBRD

• NovaSklo and IFC partner to develop Ukraine’s first modern float glass production facility

NovaSklo has signed an Engagement Letter Agreement with the International Finance Corporation (IFC) to advance the development of Ukraine’s first modern float glass manufacturing plant.

IFC support

According to the agreement, IFC, in partnership with Japan, will provide NovaSklo with advisory services and capacity-building assistance, focusing on feasibility analysis, risk assessment, and the adoption of international best practices in project development and sustainability, with the objective of supporting the company in attracting long-term financing for the development of the project in the future.

Economic and industrial impact

With an estimated investment of approximately €250 million, the project will create over 300 new jobs, with additional employment generated through local suppliers, logistics providers, and related industries. The project will also:

• introduce state-of-the-art technologies for energy-efficient and environmentally friendly glass manufacturing

• reduce reliance on costly imports

• contribute to the emergence of a new industrial sector in Ukraine

The partnership marks an important step toward building Ukraine’s modern manufacturing capabilities and supporting its broader reconstruction efforts.

Source: NovaSklo, Ministry for Development of Communities and Territories of Ukraine

CCI France Ukraine initiatives

• UPDATE: CCIFU unveils tool to support businesses in Ukraine's reconstruction

As Ukraine embarks on a concrete phase of reconstructing its territories and infrastructure, the mobilization of European and French companies has become more crucial than ever. This mobilization requires reliable and field-adapted tools to effectively support reconstruction efforts.

October 2025 update

In October 2025, the Franco-Ukrainian Chamber of Commerce and Industry (CCIFU) released an updated version of its LET’S REBUILD UKRAINE tool. The study now features 270 Ukrainian private companies, covering the entire value chain of the building and construction sector, from manufacturers to contractors

LET'S REBUILD UKRAINE: an Innovative tool

Developed by CCIFU, LET’S REBUILD UKRAINE isa study aimed at facilitating and securing the development of European companies in Ukraine's building and construction sector. Despite the war, the Ukrainian economy demonstrates remarkable resilience, with projected growth of 5% in 2024. Local sector actors will play a key role in reconstruction projects, with priority access to markets and financing. Therefore, it is essential for European companies to connect with these actors today.

Benefits of LET'S REBUILD UKRAINE

• Updated Mapping: Over 270 private Ukrainian companies are listed, covering the entire value chain, from manufacturers to construction companies.

• Tool for Suppliers and Investors: Designed for suppliers of products and solutions, investors, or any company seeking local partners.

• Gateway to the Ukrainian Market: A concrete solution for accessing the Ukrainian market, even in a context where on-site prospecting remains challenging.

Our ambition

Our goal is to save time and increase visibility for European companies by providing a clear vision and qualified contacts. We would be delighted to present this tool in more detail and discuss how it can address your challenges or those of your partners.

For any questions or to schedule a discussion, please feel free to contact: Pascal Hieronimus ccifu(@)ccifu.com.ua

Discover the first pages of the study HERE