‘Russia must pay’: How to meet Ukraine’s $411bn war bill

Support for Ukraine’s accession to the EU appears to be solidifying, as does the will to make Russia financially accountable

Security was always going to be tight at the Ukraine Recovery Conference in the Intercontinental hotel in London’s docklands this week, but the burly guards on watch at the men’s toilets seemed like a measure too far. One security guard in a sharp suit stood outside the door, hands clasped to his front. Meanwhile, bemused guests on their way to use the facilities had to brush past his colleague just inside the door, as his eyes flitted intently from each person to the next.

Suddenly the explanation for their brooding presence emerged from one of the cubicles. Denys Shmyhal, the prime minister of Ukraine, washed his hands before heading back to a nearby lounge flanked by his man-mountain minders.

Access to an EU economy would make Ukraine a far more attractive prospect for investors

It was a reminder that, despite the five-star corporate surroundings, this was no ordinary conference. Ukraine is mired in a brutal war with Russia. Shmyhal is its second most powerful politician after the president, Volodymyr Zelenskiy. That makes him a prime target, even when he’s on the lavatory.

The conference was co-hosted by the British and Ukrainian governments with the aim of signing up private investors to help pay for the rebuilding of Ukraine after the war. An all-star cast of global political heavyweights rolled into town to court the financiers.


UK prime minister Rishi Sunak was there, along with foreign secretary James Cleverly. The president of the European Commission, Ursula von der Leyen, gave a speech, followed by US secretary of state Antony Blinken. He shared a stage with the foreign ministers of Italy, Germany, Poland, France and Japan, the prime minister of Latvia and the president of Estonia.

The biggest political star of them all stared down from a huge screen: Zelenskiy gave a live address by video as he pleaded for more investment: “When we build Ukraine, we build freedom. It’s a global task.” The bankers and investors were being leaned upon with the mother of all charm offensives. And no wonder, for there is a gargantuan bill to pay.

The World Bank has estimated it will cost at least $411 billion to pay for the damage caused by Russia’s invasion last year. Shmyhal said on Thursday he expected that number to double “once Ukraine liberates all of its territories” – code for retaking Crimea and expelling pro-Russian forces from the eastern Donbass regions they have controlled since 2014. As Ukraine toils through its counteroffensive, it seems a lofty ambition. But the country is determined to look to the future.

Several themes emerged over the two-day conference. The first is that top-level political support for Ukraine to join the European Union (EU) appears to have solidified. Access to an EU economy would make Ukraine a far more attractive prospect for investors, which may be why politicians were so keen to emphasise it at the conference.

James Cleverly, the chief diplomat of Brexit Britain, smiled thinly and clapped as leader after leader took to the stage to call for Ukraine’s accession to the bloc from which the British have just walked away

Minister for Foreign Affairs Micheál Martin reaffirmed Ireland’s support for Ukraine’s EU accession at the conference. He was far from alone. Von der Leyen said she had “no doubt ... the European flag will fly over Ukraine’s cities”. Italian foreign minister Antonio Tajani also promised his nation’s strong support for Ukraine’s EU entry. “Count on Italy,” he said.

Cleverly, the chief diplomat of Brexit Britain, smiled thinly and clapped as leader after leader took to the stage to call for Ukraine’s accession to the bloc from which the British have just walked away.

Another theme apparent by the end of the two days was that despite the charm offensive, big businesses clearly still have reservations about investing in a country locked in a brutal war. Irish building materials company Kingspan confirmed it planned to move ahead with a €280 million new factory in the west of Ukraine, near Lviv.

The Australian metals tycoon Andrew Forrest pledged to pump $500 million into a redevelopment fund. But other big private sector cash announcements were few and far between. Instead there were debates about how to create a system of war insurance to soothe the worries of investors. There is little point opening a new factory if it could be taken out the next day with a Russian missile. Britain is taking the lead on trying to solve the insurance issue.

Cleverly said at the closing session that €60 billion worth of finance for Ukraine had been finalised at the conference. But the reality is that the overwhelming majority of that number is taxpayers’ cash. The EU committed €50 billion in budgetary support to 2027 in the form of loans and grants. Germany pledged €381 million. The US government announced $1.3 billion (€1.2 billion) in funding, while Britain announced $3 billion of loan guarantees and £240 million of bilateral development assistance.

Yet Ukraine also had a credible pitch for private investors that may bear fruit in time. Shmyhal told the financiers present that the postwar reconstruction of Ukraine would be the biggest national rebuilding job in Europe since the second World War. It has also promised to tackle corruption and overhaul its trading standards to bring them up to EU levels.

Zelenskiy said there would be huge opportunities to help Ukraine build a postwar green energy industry that one day could make it an exporter of electricity to the EU. The country also spies an opportunity to develop its metals industry, while Ukraine could also be a huge exporter of the mineral lithium, which is needed for batteries.

The final big idea to emerge from the conference was that, as the financial bill for the war mounts, there is a growing determination to “make Russia pay”. The mantra was repeated by Shmyhal at every opportunity. Sunak also made the pledge, as did Krisjanis Karins, the prime minister of Latvia. Even the usually cautious von der Leyen made noises about sequestering Russian assets to pay for the war.

Since the invasion, Europe has frozen about €200 million of the Russian central bank’s currency reserves, mostly in clearing houses in Belgium and Luxembourg. Sending Russian central bank cash to Ukraine would set a precedent that might make the US uncomfortable, and it would also be fraught with legal difficulty. But, for the first time, it is being openly discussed.

“That is a very important shift,” said Shmyhal. “But Russia must pay for its unjustified aggression.”