KSE: The losses and damages to Ukraine's energy sector due to Russia's shelling have exceeded $56 billion

As of May 2024, the losses and damages to Ukraine's energy sector resulting from Russia's full-scale invasion have exceeded $56.2 billion.

This assessment was published by the Kyiv School of Economics (KSE).

"As a result of Russia’s full-scale invasion of Ukraine, the energy sector suffered damages and losses of $56.2 billion, while the recovery needs, which include the complete reconstruction of destroyed facilities on the principle of “Build Back Better,” amount to $50.5 billion,"  the statement reads.

According to KSE analysts' estimates, direct losses to Ukraine's energy sector as of May 2024 exceed $16.1 billion. The most significant losses were caused by the destruction of electricity generation facilities ($8.5 billion), transmission lines ($2.1 billion), and oil and gas infrastructure ($3.3 billion). Indirect losses to the energy sector are estimated at nearly $40.1 billion, with the majority attributed to lost revenues of energy companies ($39.6 billion). An additional $0.5 billion accounts for expenses related to debris clearance and dismantling work at damaged sites.

"The restoration of Ukraine’s energy sector requires substantial financial investment, preliminarily assessed by the KSE analytical team at $50.5 billion. This amount includes the financial requirement for the full reconstruction of destroyed and damaged energy infrastructure, considering the principle of “Build Back Better” ($48.5 billion), and $2 billion to address the liquidity needs of energy companies caused by war-related revenue losses," concluded the analysts.

The restoration needs of the power energy industry are estimated at a total of $33.8 billion, including $29.3 billion for generation capacities. Another $4.6 billion is needed to restore the electricity transmission and distribution infrastructure. The estimated cost of restoring the oil and gas sector is $14.8 billion, and the district heating sector is $1.4 billion, excluding the restoration of large combined heat and power plants.