世界银行-乌克兰住房建设融资 市场评估与政策选择 Housing Construction Finance in Ukraine Market Assessment and Policy Options

PublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorized

HOUSINGCONSTRUCTIONFINANCEINUKRAINE:

MARKETASSESSMENTANDPOLICYOPTIONS

May2026

ACKNOWLEDGEMENTS

ThisreportwaswrittenbySimonWalley(LeadFinancialSectorSpecialist),JohannaJaeger,YevhenHrebeniuk(bothSeniorFinancialSectorSpecialists),IanMorgan(WorldBankConsultant)andOleksiyImas(WorldBankConsultant)withinputsfromMaricaYu(IFCManager),TengizGogotishvili(SeniorUrbanSpecialist),EduardYakubov(IFCOperationsOfficer)andMaksymKuprin(WBConsultant),undertheguidanceofMarthaLicetti(PracticeManager).

LoicChiquier(SeniorAdviser),EllenHamilton(WBConsultant)andVictoriaTetyora(OperationsOfficer)providedpeerreviewcomments.

Theauthorswouldliketoexpresstheirgratitudetothestakeholdersconsultedfortheircooperationandengagementduringthedraftingofthisreport.SeveralagenciesoftheGovernmentofUkraineandUkrainianfinancialserviceprovidersanddeveloperswereconsultedduringtheanalysisandreportdrafting.

ThisassessmentwasdraftedaspartoftheUkraineHousingRecoveryTechnicalAssistanceProgram,undertheUkraineRelief,Recovery,ReconstructionandReformTrustFund(URTF).

1

ACRONYMS

AH

AffordableHousing

AMC

AssetManagementCompany

AMCU

AntimonopolyCommitteeofUkraine

BKU

BudgetCodeofUkraine

CFF

ConstructionFinancingFunds

CIF

CorporativeInvestmentFunds

CII

CollectiveInvestmentInstitutions

CRE

CommercialRealEstate

DBN

StateBuildingNorms

SIAUP

StateInspectorateofArchitectureandUrbanPlanningofUkraine

EBRD

EuropeanBankforReconstructionandDevelopment

EDGE

ExcellenceinDesignforGreaterEfficiencies

FREO

FutureRealEstateObject

GOU

GovernmentofUkraine

IDP

InternallyDisplacedPerson

IFC

InternationalFinanceCorporation

IFIs

InternationalFinancialInstitutions

IOM

InternationalOrganizationforMigration

LCY

LocalCurrency

MBS

Mortgage-BackedSecurities

MCB

MortgageCoveredBonds

MCTD

MinistryofCommunitiesandTerritoriesDevelopment

MOE

MinistryofEconomy,EnvironmentandAgricultureofUkraine

MOF

MinistryofFinanceofUkraine

MOJ

MinistryofJusticeofUkraine

MOSP

MinistryofSocialPolicy,FamilyandUnityofUkraine

NABU

NationalAnti-CorruptionBureauofUkraine

NBU

NationalBankofUkraine

NSSMC

NationalSecuritiesandStockMarketCommission

PD/LGD

ProbabilityofDefault/LossGivenDefault

PPP

Public-PrivatePartnership

REIT

RealEstateInvestmentTrust

RMBS

ResidentialMortgage-BackedSecurities

RTO

Rent-to-Own

SIAUP

StateInspectionofArchitectureandUrbanPlanning

SME

SmallandMediumEnterprises

SSSU

StateStatisticsServiceofUkraine

STU

StateTreasuryServiceofUkraine

UFHC

UkraineFinanceHousingCompany

UIF

UnitInvestmentTrusts/MutualFund

VAT

ValueAddedTax

2

TABLEOFCONTENTS

EXECUTIVESUMMARY

3

CONSTRUCTIONFINANCEREFORMROADMAP(INDICATIVE2026–2027)

5

INTRODUCTION

6

CONTEXTANDBACKGROUND·

6

General

6

Supply

7

Demand·

9

CONSTRUCTIONINVESTMENTVEHICLESANDFINANCINGINSTRUMENTS·

9

BuyerAdvances·

11

ConstructionFinancingFunds(CFFs)

11

VentureFundsandotherclosed-endCollectiveInvestmentInstitutions(CIIs)·

13

SpecialPurposeBonds

·14

STATEANDMULTILATERALHOUSINGFINANCEMANAGEMENT

14

ImportanceofPublicProcurementforScaledHousingDelivery

14

SingleProjectPipeline·

15

CHALLENGESINCONSTRUCTIONFINANCE·

15

DeveloperCapabilityConstraintsandRelianceonBuyerAdvances

15

LimitedBankInvolvement

·17

LegalandRegulatoryGap

s 17

AbsentCapitalMarketSolutions·

20

GREENANDSUSTAINABLECONSTRUCTION·

21

EnergyEfficiencyStandardsandGreenBuildingCodes·

22

IncentivesandFinancingforGreenProjects

·22

OPPORTUNITIESFORREFORMANDINNOVATION

24

GuaranteesandCreditEnhancementTools

·24

CompletionGuaranteeFundsandEscrowAccounts·

24

Public-PrivatePartnerships(PPPs)

25

Diaspora,RemittanceandCrowdsourcing-basedFinancing·

26

IntroducingaRobustWar-RiskInsuranceFramework

27

ANNEX1.INTERNATIONALEXPERIENCE&COMPARATIVEMODELS

·28

ANNEX2.HIGH-LEVELASSESSMENTOFLEGISLATIVEANDMARKETMATURITYFORINTRODUCTION

OFANEFFECTIVEREITREGIME

30

REFERENCES

31

3

EXECUTIVESUMMARY

Constructionfinanceisanessential—yetoftenoverlooked—pillarofanyhousingfinancesystem.InUkraine,pre-existingandongoingstructuralhousinggapshavebeenmagnifiedbydamage:housinglossesexceed$57billionandmorethan2.5millionhouseholdshavebeenaffected.Withdemandforreconstructionsoaring,accesstoreliableconstructionfinancewilldeterminewhetherUkrainecanmeetthehousingneedsofreturningrefugeesandinternallydisplacedpersons.Atpresent,Ukraine’sconstructionfinancesystemisfragile.EvenbeforeRussia’sinvasionofUkraine,Ukrainianbankshadnotbeenfinancingmuchifanyofrealestateprojects,asinherentlytooriskyforthem.

Developersrelyheavilyonunregulatedbuyer-advancemechanisms—suchaspre-sales,installmentplans,andvariousnon-bankstructures—thatshiftconstructionriskontohouseholdsandkeepthefinancingsystemlargelyoutsideformalfinancialsystem.

Relianceoninstallmentsalesasawayofoff-loadingpropertiesisnotthebasisforasustainabletostableinvestmentsystemforhousing.AsEuropeanlegislationistransposedintoUkraine,sucharrangementsmaybecomenon-compliantwiththerelevantEUacquiswherecreditagreementsinvolving

HousingLosses

•13%ofhousingstockdestroyed(~2.5Mhomes)

•≈USD57billionreplacementcost

•40%oftotalreconstructionneeds

ConstructionMarket

•Permits+45%y/y(1H2025)

•Completions–6%y/y

•Materialcosts+40–60%vs2021

Developers&Governance

•>1,300developersnationwide

•Nolicensingorratingsystem

•Unpredictablepermitsandcorruptionrisk

consumersfallwithinitsscope.Thiswouldrequirethelicensingofthecreditinstitutionandsomeformofoversight.Thiswilllikelypushthedevelopertoreturntothebankingsystemforfinancialintermediationandputgreateronusonmoretraditionalproductssuchasmortgagefinancing.Inparallel,scalingprimarymortgagemarketoff-takeand,overtime,carefullypilotedrent-to-ownschemeswillshifthouseholdfinanceoffinstallmentplansmanagedbydevelopersandontoregulatedbankproducts.

Ukraine’sHousing&ConstructionFinanceLandscape

Ukraine’sconstructionfinancesystemremainsconstrainedbywardamage,limitedcredit,andweakregulation.ThehousingsysteminUkrainehadanumberofpre-existingchallengeswith650,000householdsonmunicipalwaitinglists,45percentofinhabitantslivinginovercrowdedconditions,40percentofSoviet-eraunitsinneedofcapitalrepairsandasmanyas50,000homelesspeople.

Thesixblocksbelowillustratethemaindimensionsofthechallengeandsetthestageforthereformprioritiesthatfollow.

Displacement&Need

•3.8millionIDPs

•5.7millionabroadundertemporaryprotection

•Housinggap>2.5millionunits

FinanceDepth

•Mortgages<1%ofGDP(vs10–20%)

•>96%ofnewloansviaeOselia(UFHC)

•Constructionloans≈1%ofbankportfolios

Green&Sustainability

•<20green-certifiedbuildings

•Energyuse≈2×EUaverage

•NZEBstandardadoptedApril2025

4

TheweaknessesinUkraine’sconstructionfinancesystemarenotunique.Acrossemergingeconomies,constructionlendingisoftenconstrainedbyopaquedevelopers,weakregulation,andbanks’reluctancetotakeprojectrisk.Ukrainemirrorsthesepatterns,buttheongoingsituationhasmagnifiedthem,leavinghouseholdsasthedefactofinanciersofnewhousingandexposedtoconstructionrisk.Themainchallengescanbegroupedaroundsixinterconnectedissues.

Importantly,someoftheabovenumbershavetobeconsideredinadynamiccontext.Inparticular,permitsareup45%YoYoffalowbase,butremainmateriallybelowpre-2022levelsandtrailoccupancypermits.Thereboundmasksthestructuralrealitythatnewstartsarenotyetsufficienttomaintaincurrentoutput,muchlessmeetreconstructionneeds.

1.HouseholdsAreFinancingConstruction

Issue:Developersrelyoverwhelminglyonbuyeradvancesandinstallmentsales,exposinghouseholdstoconstructionandinsolvencyrisk.

Recommendation:Introducebuyerprotectionmechanisms—mandatoryescrowaccounts,completionguaranteefunds,andring-fencedprojectSPVs—toensuredepositsareusedonlyforconstructionandrefundedifprojectsfail.Inparallel,scaleprimarymortgagechannels(incl.e-Oseliaandforeclosurereforms).

2.DevelopersSectorisopaqueandlacksaccesstofinancing

Issue:Thousandsofsmall,opaque,andunlicenseddeveloperslackminimumequity,auditedaccounts,ortrackrecords,deterringbanksandinvestors.

Recommendation:Enactadeveloperlicensingandprofessionalizationregime—minimumcapitalrequirements,certification,andapublicdeveloperregistry—toraisestandardsandcredibility,modeledonRERA(Dubai/India).

3.BanksAvoidConstructionLending

Issue:Banksseedevelopersashighcreditriskbecauseprojectriskishigh,collateralisuncertain,andduediligenceiscostly.

Recommendation:Deploycreditguaranteesandrisk-sharinginstruments—usingUFHC,IFIs,anddonorbacking—tode-riskprojectloans.Expandregulatedproject-financerules(loan-to-costlimits,milestoneverification,independentmonitors).

4.LegalandRegulatoryFragmentationUnderminesConfidence

Issue:Unpredictablepermits,retroactiverevocations,andweakforeclosuremakeconstructionfinancelegallyhazardous.

Recommendation:Streamlineland,urbanplanningandpermittingsystems—prohibitex-postpermitchanges,accelerateterritorialplanning—andharmonizecollateralandforeclosurelawstorestorelegalcertainty;followingadoptionofthePPPLawadopteffectiveregulationsonlandandinfrastructureallocationforhousingPPPs.

5.CapitalMarketsandInstitutionalInvestorsAreAbsent

Issue:Existinginstruments(CFFs,ventureCIIs,special-purposebonds)aresmall,weaklysupervised,andunsuitedforlarge-scalehousing.

Recommendation:Developcapital-marketchannelsforconstructionfinance—modernizeCFFregulation,andlaylegalfoundationsforestablishmentofREITsinthemediumtolong-termandprivatedebtfundsthatcanrefinancedevelopersandbanks.

6.ReconstructionRisks(War,Climate,Governance)KeepInvestorsOut

Issue:Ongoingsecurityrisk,energyinefficiency,andcorruptionperceptionsinflatepremiumsandblockprivatecapital.

Recommendation:Establishwar-riskinsuranceandgreen-financeframeworks—adoptandimplementwarriskinsurancemechanismsthatcrowdinprivatesectorinsurersandreinsurers,green-bondandgreen-mortgageprograms,andstricttransparency/monitoringthroughSPP—tocrowdindomesticandforeigninvestors.

Whilethechallengesaresevere,Ukraine’sreconstructionalsoprovidesararechancetoresetthesystem.Internationalexperienceshowsthatprotectingbuyers,professionalizingdevelopers,andengagingbankscancreateahealthierconstructionfinanceecosystem.Reformswillneedtobesequenced.Somequickwinscanbeachievedthroughregulatorytighteningandpilotprograms,whiledeeperstructuralreforms—requiremoretime.ProgressivelyformalizingconstructionfinanceisalsonecessaryforEUapproximation—noEUmemberoperateswithacomparableshareofinformaldeveloperfunding.

5

Theroadmapbelowoutlinesshort-termprioritiestostabilizethesystemandmedium-termactionstobuildresilienceandscale.Bothtrackswillrequirestrong

supportfrominternationalfinancialinstitutionsanddonors.

CONSTRUCTIONFINANCEREFORMROADMAP(INDICATIVE2026–2027)

2026H2

2027H1

2027H2

2026H1

Lead/Partners

ReformArea/Activity

1.ConstructionLendingRegulation

Developconceptonlegal,regulatory,andsupervisoryreformsforconstructionfinance

NBU,NSSMC,MoE,

MDCT,NABU,MoJ

Designanddeploycredit-guarantee/risk-sharingmechanismsforconstructionloans

UFHC,NBU,IFIs,MoE,MoF

Updateandharmonizecollateral,foreclosure,andbankruptcylaws

NBU,Rada,MoJ,MoSP

2.Regulationofoff-plansalesandinstallmentloans

Prepareandadoptlegislationonescrowaccounts/ConstructionCompletionFund

NBU,NSSMC,MoE,MoF,NABU,Rada

Introducering-fencedprojectSPVframeworkensuringuseoffundsonlyforconstruction

NBU,MoE,NSSMC

ComplementLaw#2518-IXwithconsumer-protectionmeasuresoninstallmentsales

NSSMC,GoU,Rada

3.RealEstateDeveloperGovernance

Adoptmandatorydeveloperlicensing/certificationwithminimumequity&conductrules

MDCT,Rada

Establishpublicdeveloperregistryandtransparencystandards(audits,disclosures)

MDCT,NSSMC

4.ConstructionApprovalProcess

Streamlineland,urbanplanningandpermittingsystems,includingstandardizationoflong-term,transferable,mortgageableleaseholdsfordevelopment

MDCT,MoJ

Adopteffectiveregulationsonlandandinfrastructureallocation

MoE,MDCT

DevelopandadoptbylawstothePPPlawrelatedtohousingsectortoenablehousingPPPs

MoE,MDCT,PPPAgency

5.ExpandintermediationfromCapitalMarkets

ModernizeregulationandstrengthensupervisionofConstructionFinanceFunds(CFFs)andCollectiveInvestmentInstitutions(CIIs)

NSSMC

DeveloplegalfoundationsforREITs/privatedebtfundsforhousingfinance

NSSMC,NBU,MoE

Createunifiedreal-estatedatasystemandpriceindicestoinforminvestors

SPF,NBU,SSSU

6.TakeonReconstructionRiskstocrowdininvestors

Adoptandimplementwarriskinsurancemechanismsthatcrowdinprivatesectorinsurersandreinsurers

MoE,insurers,donors

Developnationalgreen-financemechanismsmortgages)alignedwithpublicprograms

(green

bonds,

green

MoE,MDCT,NBU,NSSMC

●=Start/Active

6

INTRODUCTION

Constructionfinancereferstothefundingoflanddevelopmentandbuildingconstruction.Assuch,itisanessential—evenifoftenoverlooked—partofanyeffectivenationalhousingfinancesystem.Developerscanbeassociatedwithdifferentformsofconstructionfinance,eachofwhichcanplayanimportantrole:developerequity,buyerdeposits(includingpresales),developerfinancetobuyers(installmentsales),constructionloansprovidedbyfinancialintermediariestodevelopers,and,morerecently,bondmarketsthroughthesecuritizationofconstructionloans.

ThisTechnicalNoteanalysesUkraine’sconstructionfinancesector,identifyingchallengesandreforms.Itspurposeistoinformpolicymakersandstakeholdersonstrategicinterventionstorebuildanddevelophousingandconstruction,leveragingpublicandprivateresourcesforarobust,transparent,andresilientecosystemalignedwithinternationalbestpracticesandreconstructionneeds.ThenotefocusesonfinancinghousingconstructioninUkrainecovering

banks,non-bankfinancialinstitutions,andcapitalmarkets.Itexamineslegal,regulatory,andinstitutionalframeworks,plusmarketpractices.

Keystakeholdersinhousingconstructionfinanceare(i)theMinistryofEconomy,EnvironmentandAgriculture(MoE),MinistryforDevelopmentofCommunitiesandTerritory(MDCT)andMinistryofFinance(MOF)whobetweenthemareleadingthehousingagenda;(ii)theNationalSecuritiesandStockMarketCommission(NSSMC)whoistaskedtoregulateconstructionfunds;(iii)theNationalBankofUkraine(NBU),(iv)municipalitiesandhromadas,(v)UkraineFinanceHousingCompany(UFHC)whoareactingasintermediariesbetweendevelopersandhomebuyers,(vi)localfinancialinstitutions:Ukrainianbanks,non-bankfinancialinstitutions,andinstitutionalinvestor,(vii)privatesectorstakeholders:developers,constructioncompanies,realestateprofessionals,andlegalpractitioners,(viii)InternationalDevelopmentandFinancialInstitutions(IFIs)and(ix)donors.

CONTEXTANDBACKGROUND

GENERAL

ThehousingsituationinUkrainehasbeenseverelyimpactedbyRussia’sinvasionofUkraine,leadingtowidespreaddisplacementandsignificantdamagetoresidentialproperties.AccordingtotheFourthRapidDamageandNeedsAssessment(RDNA4),approximately13percentofthecountry’shousingstockhasbeendamagedordestroyed,affectingmorethan2.5millionhouseholds.ThereplacementvalueofthisdestructionisestimatedatnearlyUSD60billion,representingalmost40percentoftotalrecoveryandreconstructionneeds

1

.ByJune2025,approximately3.8millionpeopleremainedinternallydisplacedwithinUkraine

2

.Additionally,around5.7millionUkrainiansarestillseekingrefugeabroad,asoftheendofJuly2025

3

.

RevisitingthebuildingblocksofUkraine’shousingfinancesystemisakeyreformarea.MortgagemarketsremainunderdevelopedinUkraine(<1%ofGDP).Mortgagelendinghasnotrecoveredfrompastcrisesandisperceivedbybanksasunsafebusiness.SinceFebruary2022,thegovernmentsponsoredprogrameOselia,implementedbyUFHC,hasbecomethemainengineofmortgagelending.Changesareneededtomakeitmoreefficientandsustainablewhilecrowdinginprivatefinancefromhighlyliquidbanks.Constructionfinanceistheothersideofthehousingmarket:withoutbankabledeveloperfinance,mortgagescannottranslatedemandintonewsupply.Widerreformsinthehousingfinanceecosystemsuchasthestrengtheningofmortgageandforeclosurelegislationaswellasconstructionfinancereforms

1WorldBank;Ukraine,Governmentof;EuropeanUnion;Nations,United.Ukraine—FourthRapidDamageandNeedsAssessment(RDNA4):February2022—December2024(English).Washington,D.C.:WorldBankGroup.

/curated/

en/099022025114040022.

2

IOMUkraine—DisplacementandReturn:Trends,DriversandIntentions—June2025

.

3

EUAAAdhocReport:SituationinUkraineandDisplacementtotheEU+:Trends,DriversandFutureProspects,September2025

.

7

arecriticaltorebuildandrevitalizeUkraine’shousingsectorwhichformsakeypillarofUkraine’srecovery,resilientreconstruction,andreformagenda.

SUPPLY

Ukraine’srealestatedeveloperbaseiswidebutthinlycapitalized,withactivityconcentratedinlargecitiesandlimitedformallicensingoroversight.Therearemorethan1,300developersregisteredinUkraine,operatingalloverthecountrywithanotablebiastowardKyivandotherbigcities

4

,withtheprivatesectordominatingthemarket.Therearepracticallynostate-ownedconstructioncompaniesoperatingonthemarket,exceptinthedesignandarchitecturesegmentwherespecializedstate-controlledinstitutesprovidetheirservicestoprojects,particularlyininfrastructure.ThesectorispartiallyregulatedbyMDCT,throughtheStateInspectionofArchitectureandUrbanPlanning(SIAUP,Ukr:ДІАМ),whichcheckscompliancewithtechnicalstandards;however,therearenolicensingobligationsorframeworkfordevelopers.Consequently,thesedevelopersoperatealmostentirelybasedonthepremiseofcommercialviabilityoftheprojects,whichlimitsdeliveryscalingpotentialinabsenceofsignificantpublicprocurement.

Followingamoderatedownturnofconstructionactivityin2022-2023,newsupplyremainsreduced.Residentialconstructionpermitssurgedbyapproximately45%year-on-yearin1H2025toabout2.97millionm2,signalingrenewedappetitetostartprojectsinsaferregions.Yetcompletionsin1H2025edgeddownby6.4%year-on-yearto4.27millionm2,indicatingthatdevelopersarestillfinishingpre-2022pipelines

5

.Moreover,despitethey-o-yuptickinconstructionpermits,theratioofnewbuildingpermitstooccupancy/commissioningremainsbelowone,indicatingcompletionsaredrawingdownthepre-2022pipelinefasterthanitisbeingreplenished.MarketactivityisconcentratedinKyivandthewesternregions,wheremostnewhousingconstructionswerelaunched,withcertainuptickseenintheSouthofUkraine.Themajorityofapartmentsthatendupbeingsoldinvolvedpurchasesofhousingonthesecondarymarketwiththenumberofdealsintheresidentialrealestatemarketstandingat2/3ofpre-2022levels.Weak

commercialdemandfornew,andespeciallyoff-plan,housing,isholdingbackconstruction.Constructionactivityispacedbydevelopers’internalcashandoff-plancollectionsratherthanbybankprojectfinance,keepinggrowthfragile.

Figure1.Newconstructionpermits(#units)

188,964

25,472

163,492

2019

166,991

30,778

136,213

2018

112,109

22,526

89,583

2020

98,386

13,318

85,068

2022

69,294

28,354

40,940

2024

66,831

20,606

46,225

2023

144,164

2021

200

180

160

140

120

100

80

60

40

20

0

170,754

26,590

MFBSFH

Source:SSSUdatabase

Figure2.Housingmarketactivity

Numberoftaxablesaleagreements,thousandsunits

Totslnumberofsaleagreements*,thousandsunits

Ratioofnumberofnewmortgagestosaleagreements(r.h.s.)

Source:NBUFSR,1H2025

Figure3.Regionaldistributionofbuildingpermits

2024

402025

30

20

10

0

WestEast&SouthCentral&North

Source:ConfederationofBuildersofUkraine(KBU),Aug13,2025

USAND

UNIT,THO

%oftotal(selectedgroups)

1206%

1005%

804%

603%

402%

201%

00%

Q1.21Q1.22Q1.23Q1.24Q1.25

2%

4

DIM.RIA—UkrainianDevelopers2025

.

5StateStatisticsServiceofUkraine.

8

Security,costs,andfinancingconstraintscontinuetoputpressureonthesector.Marketestimatessuggestthatthematerialspricingbasketincreasedbyroughly40-60%versuspre-2022,withconcreteclosetodoubling;cementpricesroseabout20%in2023and

10%in2024amidlogisticsandenergypressures

6

.TheindexofconstructionworkinJan-Apr2025fell13%year-on-year,reflectingunevenrecoveryinresidentialandcivilengineeringactivity

7

.

Box1.InsightsfromUkraine’sConstructionMaterialsSector

AcomplementaryanalysisofUkraine’sconstructionmaterialsindustry

8

providesusefulinsightsforunderstandingthefinancingchallenge.ThatstudyinvestigatestherolethatinnovativeandsustainableconstructionmaterialsandtechnologiescanplayinUkraine’sreconstruction,withafocusonprivateinvestmentopportunities.Ithighlightsboththescaleofinvestmentneededandthefinancingconstraintsfacingproducers,usinganillustrativesubsetofhigh-potentialconstructionmaterialsandtechnologieswithlargelong-termaddressablemarketsandopportunitiesforentryofnewinvestorsinUkraine.Thesefindingsreinforcewhystrongerconstructionfinancemechanismswillbecritical.

•ScaleofInvestment:HousingreconstructionisestimatedtorequiremorethanUS$84billionoverthenextdecade,withindividualproductionprojectsoftendemandinghundredsofmillionsofeurosinCAPEX(e.g.,floatglassplants,insulationcampuses).ScalinguptheproductionanduseofinnovativeandsustainableconstructionsolutionscouldbringEUR4billioninprivateinvestment.

•FinancingGaps:Debtfinancingforconstructionmaterialsprojectshasrarelyexceeded5–7%ofCAPEX,leavingfirmsheavilyreliantonbalancesheets.Banksremaincautious,whilecapitalmarketsareunderdeveloped.

•PrivateSectorEntryModels:InvestorsmayenterthroughM&A,greenfieldorbrownfieldprojects,venturecapital,leasing,orrawmaterialinputs—eachwithdistinctfinancingneeds.

•Barriers:Highlocalinterestrates,limitedlong-termfunding,weakinsuranceproducts,andcapitaloutflowrestrictionsmakeexternalfinancingdifficult,constrainingbothhousingdevelopersandmaterialsproducers.

•SustainabilityOpportunity:Thereportemphasizesthechancetointegratesustainable,resilientandcircularconstructionpractices—fromdebrisrecyclingtoenergy-efficientmaterialssuchasgeopolymercement,basaltrebars,andhemp-basedproducts.Financingstructuresthatrewardsustainabilitycouldaccelerateuptake.

Relativeaffordabilityhasimprovedonpaper,courtesyofUAH-denominatedwageincreasesintheprivatesector(24%y-o-yin1Q2025basedonMoEstatements),butuncertaintysuppressesconversionoflatentdemandintopurchases.Secondaryand

primarysalepriceshavelargelyplateauedwhilerents-especiallyinKyiv—haveclimbed;however,securityrisk,deliveryrisk,andthinmortgageavailabilitylimitbuyerconfidenceandslowpre-salesneededtofinancenewstarts.

6Interfax,basedonmarketparticipants’opinions,

ConstructioncostsinUkrainehavedoubledsincestartofwar–DIM

7GMK,citingStateStatisticsServiceofUkraine,

ConstructionworksperformedinUkraineinJanuary-Aprilfellby13%y/y