On the 20th (local time), Volodymyr Zelensky, President of Ukraine, and Keith Kellogg, U.S. Special Representative for Ukraine and Russia, are conversing during talks held in Kyiv, Ukraine. Photo by AP Yonhap News
As peace negotiations in Ukraine show progress, interest in post-war reconstruction projects is growing. While China’s influence over Russian-occupied areas is expected to increase, there are also claims that opportunities for domestic companies to participate will expand.
On the 22nd, Kim Hwarang, Associate Research Fellow at the Korea Construction Industry Research Institute, explained in the report titled "The Movement to End the Russia-Ukraine War and a New Phase of Reconstruction Projects" that "As the possibility of Russia annexing the heavily damaged eastern region of Ukraine rises, Chinese companies are expected to have a participation advantage in reconstruction projects in that area."
He added, "Chinese state-owned construction companies are likely to continuously expand their leading position and economic influence in post-war reconstruction projects in the Russian-occupied eastern region of Ukraine, based on their strategic relationship with Russia and linked to the Belt and Road Initiative."
Since Russia’s full-scale military invasion in 2022, the estimated damage to Ukraine’s key infrastructure is about $170 billion (approximately 244.545 trillion KRW). Furthermore, reconstruction costs are predicted to reach around $486 billion.
Associate Research Fellow Kim anticipated that opportunities for domestic construction companies will gradually expand through reconstruction project consultations between the Korean and Ukrainian governments.
However, he explained that since there are uncertainties regarding cost management and geopolitical risks in local reconstruction projects, measures to address these issues are necessary. Restrictions on material supply due to the destruction of production facilities and simultaneous project execution could lead to upward pressure on labor and material costs.
Kim emphasized, "Considering the geopolitical situation, it is necessary to explore entry strategies through the establishment of a public-private system that combines the expertise of our companies and the government’s diplomatic efforts targeting the remaining regions," adding, "Given the expected need to consider various constraints such as increased volatility and uncertainty in construction costs, it seems necessary to establish institutional and financial support systems at the government level."
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