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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Ukraine Looks To Raise $40 Billion To Launch A Green Steel Industry

  • The cost of reconstruction and recovery for Ukraine after the war is more than $400 billion.
  • For the reconstruction of its steelmaking industry, Ukraine is looking to raise $40 billion.
  • There is a chance that the iron and steel industry could be rebuilt to use renewable sources of power instead of coal.

Ukraine is looking to raise initial funding of up to $40 billion to rebuild one of its most important industries – iron and steelmaking – including by reducing dependence on coal and launching a green steel industry after the war. 

The Russian invasion has decimated iron and steel production in Ukraine, which still remains the second-largest pillar of the economy after agriculture. 

Most of Ukraine's steel-producing plants are located in the eastern part of the country as they have traditionally relied on the coal mined in the Donbas region. But the Russian invasion and the occupation of part of the region, including a large steelmaking center such as Mariupol, has resulted in steel plants working at around 15% capacity most of the time. 

Ukraine hopes that it can mobilize public and private sector funding to restore its industry and economy after the end of the war. 

The cost of reconstruction and recovery for Ukraine after the war is more than $400 billion, a joint assessment by the Government of Ukraine, the World Bank Group, the European Commission, and the United Nations showed one year after the Russian invasion. 

Ukraine will need $40 billion for an initial reconstruction, whose first order of business will be the iron and steel industry, Rostyslav Shurma, deputy head of the office of Ukrainian President Volodymyr Zelenskyy, told Reuters this week. 

Ukraine is making its pitch to governments and the private sector at the ongoing Ukraine Recovery Conference 2023 hosted by Ukraine and the UK in London on Wednesday and Thursday.  Related: Energy Regulator Claims Canadian Oil Production Will Plunge 76% By 2050

The conference, bringing together governments and industry leaders to develop a multi-sector plan to help Ukraine to recover, will focus on mobilizing international support for Ukraine's economic and social stabilization and recovery from the effects of war. 

There is a chance that the iron and steel industry could be rebuilt to use renewable sources of power instead of coal, Shurma said. 

The industry, second only to agriculture, generated 10% of Ukraine's GDP in the year before the Russian invasion, and accounted for one-third of Ukraine's revenues and 15% of carbon emissions. 

The industry has suffered more than any other sector of the Ukrainian economy from the war, Oleksandr Kalenkov, president of trade association Ukrmetalurgprom, told Ukraine-based consultancy GMK Center last year. 

As of the autumn of 2022, Ukraine's steel plants were working at 15% capacity, he added. Two giant steel plants in Mariupol produced more than 40% of Ukraine's steel, Kalenkov noted. 

Shurma, the deputy head of Zelenskyy's office, told Reuters ahead of the ongoing recovery conference, 

"If you have to rebuild, it is logical to rebuild green in line with new technologies."

"Our vision is to build a 50 million tonnes green steel industry in Ukraine," Shurma added. 

The recovery of Ukraine will have strong support at the London conference, hosts and participants have said.  

The UK government will launch a $12.8 million (£10 million) InnovateUkraine Green Energy Challenge Fund at the summit. 

"The fund will spark and accelerate the development of low-carbon, affordable energy projects for Ukraine, with researchers, businesses and NGOs able to apply for financial backing to make their green energy ideas a reality, with the hope of being able to roll out some of the projects to communities in Ukraine routinely facing blackouts and energy shortages," the UK said. 


Representatives from the European Bank for Reconstruction and Development (EBRD), Ukraine's largest institutional investor, are also attending and will host on Thursday an event on "Investments in Energy for Green Recovery", moderated by Ukrainian energy think-tank DiXi Group.  

"The EBRD's aim from the start has been a very practical one: to support the resilience of Ukraine's real economy in the here and now, working primarily on energy security, vital infrastructure, food security, trade and support for the private sector," EBRD President Odile Renaud-Basso said in a statement. 

UK Foreign Secretary James Cleverly said after meeting with U.S. Secretary of State Antony Blinken in London on Tuesday, "this week is very much about encouraging the private sector to invest in Ukraine's rebuilding and recovery."  

By Tsvetana Paraskova for Oilprice.com

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