The Energy of Recovery: How Ukraine is Building the Foundation for Future Growth

14.08.2025

Russian aggression has made the energy sector not just critically important, but decisive for Ukraine’s future. The destruction and loss of a significant portion of generating capacity, attacks on infrastructure, and the occupation of the Zaporizhzhia NPP have become unprecedented challenges. However, at the same time, we have gained a unique window of opportunity. The reconstruction of the energy sector can not only restore but also renew the country, making it flexible, modern, and competitive in a world where energy has become the primary resource.

New Investments: From Theory to Contracts

In July 2025, the Ukraine Recovery Conference (URC2025) took place in Rome. It could become a turning point for Ukraine’s energy sector. Of the more than 200 agreements worth about €10 billion signed over two days, a significant portion relates specifically to energy. According to official data, this includes financial agreements in the energy sector totaling over €1.2 billion.

This is not just about general intentions, but about concrete contracts, financial commitments, and technical solutions that will begin to be implemented in the coming months. These are agreements for the development of nuclear generation, hydropower, the oil and gas complex, distributed generation, renewable energy, as well as educational and research programs. Thus, despite the ongoing hostilities and air attacks, investors see the prospect of financing energy projects in Ukraine.

The Energy of the Future: What the Focus Is On

Today, the entire world is competing for access to various types of energy. The growth in global demand of 2.2% in 2024 alone exceeded the average annual figures of the last decade.

It may seem paradoxical, but Ukraine is no exception. While the energy market experienced a decline in the first three years of the full-scale war, the trend has shifted in 2025: the country is entering a period of sustained growth in energy consumption.

The key growth factors are the recovery of industry, the construction of mil-tech clusters, the launch of new processing facilities, and, in the coming years, the development of data centers with their high demand for electricity.

That is why Ukraine’s energy focus includes several strategic directions:

• Nuclear Energy. Energoatom and Westinghouse Electric have signed a declaration on the localization of VVER-1000 fuel assembly production. In parallel, a memorandum has been signed with Holtec International to launch a plant for the production of small modular reactors (SMRs) and containers for storing spent fuel. This can strengthen Ukraine’s energy independence.
• Gas Generation. Ukrnafta is launching six distributed generation projects with a total capacity of 420 MW. With the support of international partners, new gas turbine and gas piston power plants will be commissioned as early as 2026. Specifically, the EBRD will allocate €160 million for these projects. Furthermore, Naftogaz of Ukraine has concluded a strategic memorandum with Baker Hughes on modernizing gas production and transportation, as well as implementing hydrogen solutions.
• Renewable Energy. In the renewable energy sector, the URMM (Ukraine Renewable Energy Risk Mitigation Mechanism) was created to attract investment in new projects. The EBRD and EIB are also considering it as a mechanism to guarantee a minimum price for “green” electricity. This is extremely relevant for Ukraine given the poor state of settlements between NPC Ukrenergo and the “Guaranteed Buyer” SE. The URMM is already backed by contributions from the EU (€180 million) and the Netherlands (€12 million), with participation expected from Germany, Sweden, and Switzerland. The overall goal of URMM is to attract €1.5 billion in investments for the construction of solar and wind power plants.
• Grids, HPPs, and Energy Efficiency. For the restoration of the energy sector, the EIB is also allocating €120 million to repair HPPs damaged by attacks. This will help partially return capacity to operation. A memorandum has been signed between Ukrenergo and the Italian company Terna on system synchronization and the exchange of experience in grid management. Companies such as Siemens, Voith, Webuild, and other players are also involved in modernizing critical infrastructure.

Resource Base and Challenges

The Ukraine Energy Support Fund, created in 2022 with the participation of the Energy Community, has already accumulated over €1.16 billion from 33 donors.

This has allowed for the signing of over 790 contracts for the supply of equipment to more than 50 energy companies in 21 regions of Ukraine.

At the same time, the current gap between the needs of the energy system and the available resources is estimated at €617 million.

This once again emphasizes that we must not only use the funds raised but also build a systemic financing model – one that is effective, transparent, and results-oriented.

Outlook: A New Energy Model

Ukraine has all the prerequisites to become a regional energy hub. We are already rethinking our generation structure, reducing dependence on centralized solutions, and moving towards decentralization and smart solutions. In parallel, we are integrating into the European market, adopting not only technologies but also principles of transparent governance and regulation.

But most importantly, we are starting to think strategically. If the driver of the energy boom in the US is artificial intelligence, then in Ukraine, it is industrial development, mil-tech, and data centers.

We understand that recovery is not about returning to the pre-war state. It is about creating a new model based on energy independence, flexibility, and technological development.

And it is energy, as in every great transformation, that comes first.

Andrii Kalinov

About the Author

Andrii Petrovych Kalinov, Technical Director of NVP ENERGO-PLUS, Professor, PhD in Engineering.

Since 2002, he has been a lecturer at the Kremenchuk Mykhailo Ostrohradskyi National University, where he holds the position of Professor at the Department of Automatic Control Systems and Electric Drives. He is the author of hundreds of scientific publications and a recipient of several state awards, including the Prize of the President of Ukraine for Young Scientists. His research focuses on energy efficiency, diagnostics of electric drives, and the implementation of innovations in industrial automation. As part of the ENERGO-PLUS team, he has implemented dozens of engineering projects that combine a scientific approach with practical solutions for the energy sector. He actively develops partnerships with technical universities, participates in technology transfer, and promotes a culture of R&D in production processes.