UK's Ukraine reconstruction conference asks global businesses for billions

New rules to tie release of Russian sanctions to compensation for Kyiv's war losses announced

British Prime Minister Rishi Sunak, left, and Ukrainian President Volodomyr Zelenskyy will address the Ukraine reconstruction conference in London. Getty

UK Prime Minister Rishi Sunak is to make the case to investors to back a financially-stronger, technologically-advance Ukraine emerging from the war with Russia at a conference that opens in London on Tuesday.

Officials see the focus on rebuilding and long-term reconstruction as vital planks of Ukraine's prosperity.

The messages and outcomes at the jointly hosted Ukraine Recovery Conference from private companies and dozens of countries is just as important as the political support Kyiv has gained from G7, EU, Nato and at the UN General Assembly.

The business chiefs and global investors will join delegations from 61 states.

Ukrainian President Volodymyr Zelenskyy will participate online, and European Commission President Ursula von der Leyen and US Secretary of State Antony Blinken are expected to speak at the opening session.

German Foreign Minister Annalena Baerbock will address the opening panel as her country is scheduled to host next year's recovery conference.

In advance, the UK introduced legislation that would keep Russia sanctions in place until Moscow pays compensation to Ukraine.

Its package also included a new route to allow sanctioned individuals to donate frozen funds to Ukrainian reconstruction.

“We will also mandate that persons and entities in the UK, or UK persons and entities overseas, who are designated under the Russia financial sanctions regime, must disclose assets they hold in the UK,” said Foreign Secretary James Cleverly.

In his remarks on Wednesday, Mr Sunak is expected to make the case for greater innovation focus in Ukraine, which was becoming a major player in the IT industry before the Russian invasion.

“Ukraine's bravery on the battlefield must be matched by the vision of the private sector to help the country rebuild and recover,” he will say.

“Time and time again, Ukraine has shown its ability to rapidly harness innovation and creativity, and I know its recovery will be no different.

“A financially stronger, technologically advanced Ukraine will bolster its ability to drive Russia back behind its borders and build a brighter future for a sovereign and modern Ukraine of the future.”

Rishi Sunak plays host to Ukraine's President Volodymyr Zelenskyy at Chequers, a country retreat of British prime ministers since 1921, in Aylesbury, Buckinghamshire, on May 15. Reuters

As part of Ukraine's effort to build a vision for the reconstruction of its economy, senior officials said it wants to attract $40 billion to fund the first part of a Green Marshall Plan.

To seed the idea, the UK plans to launch a £10 million green energy challenge fund at the summit on Wednesday.

The World Bank estimates Ukraine's reconstruction will cost $411 billion, three times the country's gross domestic product. Since Russia's invasion in February 2022, external backers have poured $59 billion into Ukraine for financing.

Giving the figure of $40 billion for an initial phase of reconstruction, Rostyslav Shurma, a deputy head of Mr Zelenskyy's office, said the first focus would be the iron and steel industry.

The sector contributed around 10 per cent of Ukrainian GDP in 2021, a third of export revenue and employed around 600,000 people. It also accounted for 15 per cent of the country's carbon emissions, and Mr Shurma said there was now an opportunity to build an industry driven by renewable energy.

“If you have to rebuild, it is logical to rebuild green in line with new technologies,” Mr Shurma said. “Our vision is to build a 50-million tonnes green steel industry in Ukraine.”

BlackRock and JPMorgan Chase have said they will partner with Ukraine to launch a reconstruction bank that will serve as a conduit for public seed capital to fund rebuilding projects.