Ukraine recovery conference urged to focus on preventing energy blackouts
Russian damage to Ukraine’s power grid has led to calls for a recovery conference starting in Berlin on Tuesday to pivot away from long-term reconstruction and focus on preventing prolonged energy blackouts this winter.
Lengthy summer power cuts, as well as domestic price increases, are already afflicting Ukraine, with state agencies forced to cut energy use, adding urgency to the calls to boost air defences.
The conference, due to be addressed by the Ukrainian president, Volodymyr Zelenskiy, will include the unveiling of 95 investment projects needing western funds as well as a mass of progress reports against more than 200 reform targets set by the EU and multilateral banks.
Ukrainian NGOs have been expressing fear that a two-day discussion about a plan for reconstruction after a currently theoretical Russian military defeat may seem irrelevant to the immediate need of boosting resilience.
In one of the many calls for the conference to focus on immediate crises, Mattia Nelles, the chief executive of the German-Ukrainian Bureau, said: “Stop talking about abstract long-term recovery. Let’s focus on not just providing Ukraine with sufficient weapons and ammunition but also helping focus on energy resilience. With well over 50% of the country’s energy production destroyed, the situation looks increasingly dire.”
Speaking on Friday, Ukraine’s deputy finance minister Olga Zykova said Russia’s terror attacks on Ukraine’s power grid had destroyed 8 gigawatts of capacity, forcing a fall in the GDP forecast from 4.6% to 3.5%. Restoration was a top priority.
She added it was now certain that the war would not be over in 2024.
Geoffrey Pyatt, the head of the G7+ energy coordinating group, said Ukraine’s energy system was in “an extremely fragile state” as a result of Russian attacks on energy infrastructure.
Top officials from the European Bank for Reconstruction and Development visited Kyiv this week to sign a plan to offer €300m (£250m) of new funding for Ukraine’s state-owned energy sector companies and to explore further support for the energy sector.
At the weekend the US president, Joe Biden, announced a $225m (£180m) package of extra air defence interceptors in an attempt to slow the damage. This is on top of the money distributed to the multinational energy support fund which has been so far reliant on grants from Germany, the EU, Sweden and the UK.
Western diplomats have expressed concerns at the dismissal a month ago of the deputy prime minister for restoration, Oleksandr Kubrakov, and a plan to split his ministry in half. Josh Rudolph, a senior fellow at the German Marshall Fund thinktank, said Kubrakov and his team had been regarded as innovators in fighting corruption and building transparency. He said: “Central power has come to wipe out the team that was building a transparent system of national restoration and replaces it with loyalists.” Kubrakov had set up internet-based forms of transparency.
One analyst said: “The words reconstruction and recovery are like a lightning rod, in fact recovery has become a toxic word. Ukrainians are sick and tired of the international conference about recovery. They say they don’t need a recovery conference. We want to prevent recovery from being needed, and that requires a harder edge about resilience, weapons and energy.”
Last year’s event, held in London in the optimistic context of an imminent Ukrainian offensive, focused on building private sector involvement in Ukraine’s economic recovery.
Berlin has been planning for the conference for months and has set out four broad themes including mobilising the private sector for reconstruction and economic growth, social capital and human capital for the future of Ukraine, recovery of municipalities and regions, and finally the necessary internal reforms to meet EU accession criteria, including revamping the supreme court to root out corruption.
