Restoration of apartment buildings damaged as a result of the armed aggression of the Russian Federation

Sector

Housing

Stream

Restoration of apartment buildings damaged as a result of the armed aggression of the Russian Federation

Entry into Portfolio

Included in the State Single Project Pipeline

General Information

Program Description

The program is designed for the period 2026-2028 and is aimed at restoring 1,320 apartment buildings (hereinafter - BKB) that suffered significant damage as a result of the full-scale armed aggression of the Russian Federation against Ukraine. The result of the program will be the rapid restoration and improvement of housing conditions for approximately 333,960  women and men, including their vulnerable groups.

The program is implemented through the implementation of public investment projects to carry out major repairs of apartment buildings that have been damaged as a result of armed aggression.

Investment projects can be initiated by regional state administrations (military administrations), military administrations of settlements formed within the territories of territorial communities and/or local self-government bodies (hereinafter referred to as LGUs).

Selected BKBs must be entered into the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by the Armed Aggression of the Russian Federation Against of Ukraine.

All projects must meet the requirements of energy efficiency and barrier-free access.

A multi-channel mixed financial model for the implementation of the Program is planned, which involves a combination of budget funds (state and local budgets), financial resources of international partners (investment grants, loans, technical assistance).

The priority of financing investment projects within the Program is determined individually for each investment project, taking into account the expected socio-economic impact and source of financing.

Thus, the Program serves as an institutional framework for the implementation of housing renovation projects in the medium and long term, ensuring planning, standardization of decisions and capacity building of territorial communities and regions in the field of housing policy.

See more

Strategic Case

Program Goal

Main Goal: Reconstruction of damaged/destroyed assets
Secondary goal: Ensuring inclusiveness and equal opportunities, Implementation of innovations and energy-efficient solutions, Reducing territorial or social disparities
Problems: The Russian Federation’s full-scale invasion of Ukraine has caused widespread destruction of infrastructure, particularly in the housing sector, leading to a deterioration in the living conditions of millions of citizens. According to the Fourth Rapid Damage and Recovery Assessment (RDNA4), jointly conducted by the Government of Ukraine, the World Bank, the European Commission and the United Nations, as of the end of 2024, direct damage to the housing sector exceeded US$57 billion, accounting for about 33% of all losses. More than 2.6 million housing units were damaged or destroyed, equivalent to almost 13% of the total housing stock in Ukraine. Apartment buildings (AHUs) were the most affected, accounting for 86% of the total damage in value terms. The problem is particularly acute in the cities of the following regions: Donetsk, Kharkiv, Luhansk, Kyiv, Mykolaiv, Kherson and Dnipropetrovsk regions, where more than 75% of the cost of all damage is concentrated. Large-scale destruction has significantly exacerbated the already existing shortage of quality, affordable and safe housing in Ukraine. According to a study by the International Organization for Migration (2024), about 3 million people live in damaged houses, with 47% of IDPs having lost or having damaged housing. 31% of IDPs do not have access to adequate housing in their current place of residence, and elderly IDPs are particularly vulnerable to housing isolation. Nationally, according to the Ministry of Social Policy, about 4.6 million people are registered as internally displaced persons. High rent and utility costs (up to 70% of income) create additional social and economic pressure, and the lack of long-term contracts, legal guarantees of residence, and limited access to compensation increase the risks of housing instability. As of July 2025, according to the Register of Damaged and Destroyed Property (RPZM), more than 34 thousand damaged BKB have been documented. Today, about 2,200 damaged apartment buildings require restoration through major repairs (including project documentation for 473 objects). Restoration is carried out at the expense of various sources of financing. In particular, today 150 apartment buildings are being restored with funds from UNITED24 and the Fund for the Elimination of the Consequences of Armed Aggression. About 200 apartment buildings will be restored with funds from the World Bank as part of the project "Housing Repair for the Restoration of People's Rights and Opportunities (HORE)", about 200 more houses are planned to be restored with a loan from the European Investment Bank. During the preparation of the Program, possible alternative options for responding to the problem of damaged multi-apartment housing stock were considered, which could be implemented without additional budgetary burden or using only existing resources. However, none of these options allows for sufficient scale, systematicity and fairness in responding to the housing crisis caused by the war. The main approaches considered are listed below. Temporary accommodation of affected persons in private housing, dormitories, modular towns or through rental compensation This approach is already partially implemented by the state and donors. However, it is exclusively temporary and does not solve the problem of the shortage of permanent housing; does not ensure the stability of housing conditions, especially for vulnerable categories of women and men (elderly people, families with children, people with disabilities); requires constant budget transfers and does not promote self-sufficiency; does not create capital assets on the balance sheet of communities or the state. Existing state recovery mechanisms (for example, the eRecovery program or the Energy Efficiency Fund’s Rebuild Home program) do not cover a significant portion of damaged BKBs. The Rebuild Home program is available only to condominiums, while only 23% of damaged BKBs have condominiums. At the same time, BKB residents who are IDPs or are abroad cannot initiate the creation of associations on their own, which creates additional barriers to access to support. In many communities, including de-occupied and frontline communities, recovery is limited to emergency repairs. Due to limited resources of citizens and local governments, major repairs of damaged houses are not carried out or are postponed, which not only hinders the return of the population, but also slows down the recovery of economic activity. In addition, BKBs built during the Soviet period have mostly already exhausted their standard service life, which creates the need to combine recovery with modernization, energy efficiency, and increased resilience to new risks. In particular, a significant part of the damage concerns public places (roofs, basements, elevators, utility networks), the repair of which is not covered by current compensation programs for individuals (for example, the “eReconstruction” program provides compensation only for damage to personal property, but not public places). Thus, the lack of an effective institutional mechanism to support the overhaul of damaged BKB is one of the key system gaps. If centralized support for the overhaul of damaged BKB is not provided, the housing crisis will deepen, which will lead to increased social tension, increased emigration sentiment among the working-age population, loss of human capital, and a decrease in the level of citizens’ trust in institutions. For territorial communities, especially in deoccupied and frontline areas, the situation threatens financial instability: limited own resources and the loss of a solvent population will not allow them to independently ensure the restoration of housing infrastructure. The lack of centralized investments jeopardizes the ability of communities to stabilize, restore economic activity and provide for the basic needs of residents. Thus, the implementation of the Program is a tool for overcoming these challenges and is a prerequisite not only for restoring the housing conditions of millions of Ukrainians, but also for ensuring social cohesion and will contribute to the achievement of: 1) The identified priorities and objectives of the State Strategy for Regional Development 2021-2027, approved by the Resolution of the Cabinet of Ministers of Ukraine dated 05.08.2020 No. 695 (as amended), namely: the priority of “creating security and socio-economic conditions for the return of Ukrainian citizens to regions and territorial communities”; task “Comfortable communities: implementation of updated standards for the accessibility of residential buildings with safe, comfortable living conditions, taking into account the needs of different groups of citizens, implementation of new approaches to providing people with housing, taking into account best practices and experience of EU member states; direction “Investment instruments of regional policy” to promote the attraction of funds from international technical assistance and international financial organizations for the implementation of public investment projects for the restoration and development of territorial communities. 2) Tasks of the Plan of Ukraine, which was approved by the Order of the Cabinet of Ministers of Ukraine dated March 18, 2024 No. 244-r, in order to implement the European Union initiative “Ukraine Facility”, introduced by Regulation (EU) of the European Parliament and of the Council (EU) dated February 29, 2024 No. 2024/792, namely: The document defines investments in housing (compensation to persons whose housing was damaged or destroyed as a result of military actions) as part of the investments to be made within the framework of Component I of the Ukraine Facility. 3) Tasks of the Priority Action Plan of the Government of Ukraine for 2025, approved by the Resolution of the Cabinet of Ministers of Ukraine dated February 18, 2025 No. 131-p, which, in particular, provides for ensuring support for the thermal modernization of buildings; fulfillment of European integration obligations in the field of energy efficiency. 4) Implementation of the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their Member States, on the other hand: the revised Directive on the Energy Performance of Buildings (EU/2024/1275), the revised Directive on Energy Efficiency (EU/2023/1791). 5) Implementation of the Decree of the President of Ukraine No. 722/2019 “On the Sustainable Development Goals of Ukraine for the period up to 2030”, namely paragraph 11: ensuring openness, safety, viability and environmental sustainability of cities, other populated points; and also point 7: ensuring access to affordable, reliable, sustainable modern energy sources for all, and point 13: taking urgent measures to combat climate change and its consequences. 6) Implementation of the provisions of the Law of Ukraine No. 2923-IX “On Compensation for Damage and Destruction of Certain Categories of Real Estate Objects as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by Armed Aggression of the Russian Federation against Ukraine, and the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, and Sabotage Caused by Armed Aggression of the Russian Federation against Ukraine”. Also, the restoration of the BKB is a component of the sectoral State Housing Policy Strategy of Ukraine in the direction of “Restoration of the Housing Stock”, which is currently in the process of being developed.

Strategic Relevance of the Program

Sector
Housing
Subsector
Housing Reconstruction
Stream
Restoration of apartment buildings damaged as a result of the armed aggression of the Russian Federation
Strategic Document
State Strategy for Regional Development for 2021–2027
Task
Restoration of apartment buildings damaged as a result of the armed aggression of the Russian Federation

Program Objectives

Indicator
Baseline Value
Target Value

Restoration and improvement of housing conditions for women and men whose homes have suffered significant damage

0 human

333960 human

Economic Case

Program Components

Financial justification

Total estimated program cost

74'968'080'000 UAH

Estimated cost of program components

74'968'080'000 UAH

Component

Amount, uah

Investment

₴70'469'995'200

Preparatory

₴4'498'084'800

Cost justification

Short description

Justification document

Untitled

Sources and mechanisms of financial support for the implementation of programs.

Status
Funding mechanisms
Coverage, %

Investment

Non-repayable financing. Grant financing from existing international support projects, international technical assistance programs, and grants. Direct expenditures.

30%

Reimbursable financing. Debt financing. Loans borrowed by the state from foreign governments, foreign financial institutions, and IFIs

30%

Non-repayable financing. Direct budget financing. Funded from the general fund of the state budget.

40%

Justification document
Financial justification of selected sources and mechanisms of financing the Investment Program_BKB overhauls.pdf
What potential funding sources can be mobilized on the basis of prior agreements or intentions to cooperate (if any)

Potential sources of financing for the implementation of the program at the moment are: attracting credit financing from the European Investment Bank, the Council of Europe Development Bank. Letters of confirmation of readiness to support the implementation of the relevant projects have been received from the specified MFIs.

Management Case

Organizational Measures

Implementation stage (2026-2028) - provides for the comprehensive renovation of 1,320 multi-apartment residential buildings (BKB). The expected result is the improvement of housing conditions for more than 333,960 women and men, including representatives of their vulnerable groups. The stage provides for the full cycle of implementation of public investment projects: from the selection of communities and residential facilities, inspection of facilities, development of project documentation - to construction work with subsequent commissioning

36 months

Risk Assessment

Risk

Probability

Degree

Strategy

Risk

Exchange rate fluctuations when purchasing imported materials.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Insufficient monitoring and reporting on the use of funds and results.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Unequal access of different categories of the population to participation in the Program.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Deterioration of the social climate in communities due to the creation of "restored" and "unrestored" zones.

Probability

Medium

Degree

Considerable

Strategy

Acceptance

Risk

Insufficient consideration of the needs of low-mobility population groups in infrastructure solutions.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Incompatibility of technical solutions with the principles of energy efficiency and accessibility.

Probability

Medium

Degree

Considerable

Strategy

Avoidance

Risk

Loss of green spaces during the restoration of nearby infrastructure.

Probability

Medium

Degree

Minor

Strategy

Reduction

Risk

Mismatch between price and quality of services due to reduced profitability of contractors.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Shortage of building materials or limited supply of certain resources on the domestic market.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

The complexity of modernizing engineering infrastructure systems (heating, water supply).

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Violation of project implementation schedules due to imperfect planning, delays in tenders, and obtaining permits.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Currency risks when attracting external financing

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Use of building materials containing hazardous substances.

Probability

Low

Degree

Considerable

Strategy

Reduction

Risk

Improper handling of waste from destruction, construction and demolition during restoration.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Pollution of soil, water or air during construction work.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Lack of skilled labor in the construction sector, especially in regions with high levels of destruction.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Inadequate quality of technical inspection of buildings, which will lead to ineffective design.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Social tension due to perceived unfair distribution of resources between communities or categories of beneficiaries.

Probability

Medium

Degree

Considerable

Strategy

Avoidance

Risk

Resistance or passivity on the part of individual local councils due to political competition or insufficient institutional capacity.

Probability

Low

Degree

Considerable

Strategy

Reduction

Risk

Failure of local budgets to fulfill their obligations regarding co-financing.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Dissatisfaction with the quality of repair work or delays in implementation, which can lead to a loss of trust in public institutions among community residents.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Slowing economic recovery in regions, which reduces demand for housing in certain communities

Probability

Medium

Degree

Minor

Strategy

Acceptance

Risk

Occurrence of construction defects due to poor quality work.

Probability

Low

Degree

Critical

Strategy

Transfer

Risk

Delays in receiving external (loan or grant) funding.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Insufficient involvement of local businesses in the implementation of the program, which reduces the multiplier effect.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Low quality of available design and estimate documentation.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Insufficient institutional capacity of local self-government bodies (LSGs), regional state administrations/military administrations to manage projects

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Delays in ratification or approval of international agreements, which are a prerequisite for donor funding.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Damage or destruction of buildings during construction due to repeated missile and drone attacks

Probability

Low

Degree

Considerable

Strategy

Acceptance

Risk

Low competition or cartel collusion.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Changing political priorities at the national level, which may lead to a decrease in funding or support for the Program.

Probability

Medium

Degree

Critical

Strategy

Avoidance

Risk

Low ability of communities to attract credit financing and fulfill debt obligations.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Inflation in the construction sector, which will affect the cost of work, materials, and equipment.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Lack of budget funding from the state in certain years of program implementation.

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Delays in procurement or appeals.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Public criticism due to slow recovery or opaque project selection

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Deviations from technical requirements during construction work

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Growing expectations of the population that exceed the capabilities of the Program.

Probability

Medium

Degree

Minor

Strategy

Acceptance

Risk

Insufficient development of related sectors (logistics, materials production), which complicates the implementation of investment projects.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Lack of experience of local self-government bodies (LSGs), regional state administrations/military administrations in interacting with donors or IFOs.

Probability

Medium

Degree

Considerable

Strategy

Reduction