Prior to the Ukrainian war the Ukraine maintained a diversified energy mix with a focus on fossil fuels and nuclear power. Following extensive wartime damage to the energy infrastructure, the country’s effective generation capacity has fallen to around one third of its pre-war level. Current reconstruction plans prioritize the expansion of renewable energy and the introduction of Small Modular Reactors (SMRs). The total cost of restoring the energy sector over the next decade is estimated at US$ 47.1 billion.
This massive effort raises numerous legal questions, especially concerning the contractual frameworks governing reconstruction projects, as well as risk related to compliance and administrative challenges.
I. Ukraine’s Energy Infrastructure
In February 2022, Ukraine’s electricity generation capacity was reported at 59 gigawatts (GW).[1] Of this total, nuclear energy accounted for around 23%. Ukraine operated 15 nuclear reactors across four nuclear power plants, including the Zaporizhzhia Nuclear Power Station — Europe’s largest nuclear facility — with an installed capacity of approximately 6 GW.
Fossil fuels like coal and gas sourced primarily from the Donbas region, contributed roughly 49%, to the energy generation. Renewable energy sources, while still developing, constituted around 17% of the energy mix. Within this category, solar energy was the most significant contributor, followed by hydro and wind energy. Biomass and waste played only a minor role.
The energy supply sector contributed approximately 7 to 8% to the country’s GDP, with transit fees for Russian gas accounting for an estimated 0.3%.[2]
II. Necessity of Reconstruction
1. Current Situation
Since the beginning of Russia’s invasion in February 2022, Ukraine’s energy infrastructure has suffered massive damage. The war has not only created a humanitarian and geopolitical crisis but has also severely disrupted the country’s energy sovereignty and grid stability.
Approximately 71% of the country’s pre-war electricity generation capacity – equivalent to 42 GW – has either been destroyed or occupied, leading to a dramatic reduction in overall production capabilities. As a result, Ukraine’s effective generation capacity has fallen to nearly one-third of its pre-war level.[3]
All regional power systems (RPSs) in Ukraine have sustained significant damage. Thermal power generation has been particularly affected, with around 90% of its capacity reportedly destroyed.
Hydropower has also suffered, with 50% of all installations damaged and 40% considered destroyed. By contrast, major solar or wind power installations located outside active conflict zones have remained largely intact.
In addition, Ukraine’s electricity transmission and distribution networks have suffered extensive damage. High-voltage transmission lines, substations, and switching stations have repeatedly been targeted in coordinated attacks aimed at destabilising the national grid. These components, though less visible, are obviously critical to ensuring a reliable power supply across the country.
The energy infrastructure has sustained both direct physical damage and cascading disruptions. When generation plants are affected, emergency shutdowns are often required to prevent grid overload or instability, which in turn reduce transmission functionality.
This has led to frequent and wide-ranging blackouts, even in areas far from the front lines, and has significantly impaired the flexibility and resilience of the system.
2. Reconstruction
The reconstruction of Ukraine’s electricity infrastructure must meet strategic, economic, and environmental imperatives. Researchers have identified four core criteria:
First, the restoration of generation capacity must occur rapidly to ensure the swift recovery of essential services.
Second, the new infrastructure must be made more resilient to military attacks through decentralization. Prior to the war, Ukraine’s grid was dominated by large, centralized power plants—strategic targets that proved highly vulnerable.
Third, energy independence is crucial. Any future system must eliminate reliance on imported fuels such as gas, coal, or uranium — particularly from Russia.
Fourth, the energy system must reduce emissions to align with global climate goals and to attract international investment, especially from EU and OECD countries. This is particularly relevant given the EU’s carbon border adjustment mechanism and emissions trading frameworks.
a) Renewable Energy
Wind and solar energy are the most promising candidates to fulfil all four criteria. They require no fuel imports, emit no greenhouse gases, and lend themselves to decentralized deployment through modular installations, which is inherently more resilient and less vulnerable to targeted attacks.
Moreover, wind and solar facilities can be built significantly faster than nuclear plants: wind farms, for example, have an average construction time of just twelve months, compared to approximately ninety months for nuclear reactors.
Hydropower also offers significant potential, given Ukraine’s geographical conditions.
Importantly, the equipment for renewable energy installations — such as turbines and photovoltaic panels — can be sourced without reliance on Russian supply chains. Once installed, these systems are entirely independent of foreign fuel inputs. Furthermore, the clean nature of renewable electricity generation strengthens Ukraine’s position as a credible and desirable partner for international climate-focused collaborations and trade.
Renewables have significant long-term potential in Ukraine. Theoretical capacity estimates include up to 180 GW of wind and 39 GW of solar power generation (219 GW in total) — almost four times the country’s pre-war capacity of 59 GW.[4]
Geographically, the southern and eastern regions of Ukraine offer the highest potential for such development. A transition to a decentralized, renewable-based grid would therefore not only facilitate rapid reconstruction but also lay the foundation for a secure, independent, and climate-compatible energy future.
b) Small Modular Reactors
In parallel, the Ukrainian government is pursuing a nuclear-centered strategy, aimed at integrating Small Modular Reactors (SMRs) into its future energy mix. SMRs are compact nuclear reactors with an electrical output of up to 300 MWe and a thermal output of less than 1,000 MW. Modularity refers primarily to the design and site configuration, not necessarily to the reactor technology used.[5]
Central to the SMR initiative in Ukraine is the state-owned enterprise Energoatom, which holds the exclusive mandate to operate nuclear facilities in Ukraine and plays a key role in shaping national energy policy.
In recent years, Energoatom has entered into a series of international cooperation agreements with leading SMR developers — including Holtec International, Westinghouse, and NuScale Power.[6] One such agreement envisions the construction of up to 20 SMR-160 reactors.[7]
c) Financial Burden
According to current estimates, Ukraine will require approximately US$ 47.1 billion over the course of ten years to fully restore and rebuild its energy sector.[8]
The power generation sector alone accounts for the bulk of the estimated cost, with approximately US$ 40.4 billion earmarked for reconstruction focused on principles of a green energy transition and aligned with EU agreements.[9]
Notably, 74 percent of the total reconstruction budget — approximately US$29.8 billion — is projected to be allocated to renewable energy, specifically in the hydro, wind, and solar sectors. This strategic focus underscores Ukraine’s intention to move away from centralized, fossil-fuel-based systems in favor of decentralized and emissions-free energy generation.[10]
III. Legal Challenges
1. Contractual Framework
The scale and urgency of reconstruction highlight the importance of efficient and bankable contractual frameworks. In this context, the use of standard form contracts can offer significant advantages over individually negotiated agreements — particularly in terms of bankability, administrative efficiency, predictability, and ease of implementation. In (post-)conflict settings, where time, administrative resources, and legal certainty are crucial, well-established model contracts can help to streamline procurement and execution processes.
FIDIC’s suite of contract templates is widely recognised in international construction projects. In particular, the FIDIC Green Book (Second Edition, 2022) provides a simplified and flexible framework that can be readily tailored to the parties’ specific legal and commercial needs, offering a leaner alternative to the more complex FIDIC Red and Yellow Books.
Its design makes the FIDIC Green Book especially appropriate for small to medium-scale reconstruction efforts, including modular renewable energy projects such as wind, solar and hydro installations, where rapid deployment is essential. Key features include simplified variation procedures, clearly defined entitlements for excusable and compensable delays, and the introduction of predetermined prolongation costs. These mechanisms reduce procedural burdens and mitigate the risk of protracted disputes, enabling parties to focus on execution rather than claim resolution.
That said, the FIDIC Green Book is not a one-size-fits-all solution. While its structure offers considerable advantages, its effective application requires thoughtful adaptation to the specific legal, technical, and operational context of each project. Tailored amendments remain essential to address project-specific risks and to ensure compliance with applicable regulatory frameworks.
Further insights are available in the COMINDIS legal note, “FIDIC Green Book – Short Form of Contract”.[11]
2. Compliance Risks
Despite notable reforms, corruption remains a key concern in Ukraine.
According to Transparency International’s 2024 Corruption Perceptions Index (CPI), Ukraine scores 35/100, ranking 105th out of 180 countries – a slight decline from the previous year. This assessment underscores the continued relevance of integrity mechanisms in reconstruction projects involving substantial public and foreign funding.
Independent oversight, transparent procurement, and accountable implementation frameworks are essential to maintaining the trust of international partners and the Ukrainian public.
3. Administrative challenges
Reconstruction also faces considerable administrative challenges. These affect not only public authorities but also private actors — such as contractors, engineering firms, and suppliers .
Common issues include navigating unfamiliar regulatory frameworks, complying with complex procurement and reporting requirements, managing multi-layered approval procedures, and ensuring timely coordination across multiple stakeholders.
In (post-)conflict environments, the challenges are often exacerbated by logistical constraints, and limited access to reliable administrative support. For international contractors in particular, uncertainties regarding licensing, taxation, and documentation standards may create additional legal and operational risks.
Therefore, tailored legal advice can play a crucial role in identifying regulatory pitfalls, clarifying procedural obligations, and developing risk-mitigating strategies that support the efficient and compliant implementation of reconstruction projects.
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COMINDIS is a leading Boutique Law firm specialized in international Plant Engineering, Infrastructure and Energy.
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COMINDIS Partnerschaft von Rechtsanwälten mbB
Berliner Allee 22
40212 Düsseldorf
Germany
T +49 211 542249 20
eric.decker@comindis.com
ingo.kuehl@comindis.com
www.comindis.com
Please be aware that this publication shall not be taken as a legal advice. Any project requires intensive legal review and negotiations with the contractual partner.
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[1] This and the data sets of the following two paragraphs are taken from the commentary „Why renewables should be at the center of rebuilding the Ukrainian electricity system,“ published in Joule, Volume 8, pages 2715–2731, October 16, 2024.
[2] World Bank. Third Rapid Damage and Needs Assessment (RDNA3): February 2022 – December 2023. Washington, DC: World Bank, 2023, pp. 135, ff. available at: https://ukraine.un.org/sites/default/files/2024-02/UA%20RDNA3%20report%20EN.pdf.
[3] See supra note 1, also regarding following paragraphs.
[4] See supra note 1, also regarding following paragraph.
[5] Regarding SMRs see e.g. Bürkle / Decker, “Small Modular Reactors – Kleine Anlagen, große Ambitionen. (K)ein Modell für Deutschland“, in EnK-Aktuell 2025, 010542.
[6] Presentation by Serhii Kopyl (Energoatom), „Possibilities and Opportunities of SMR Deployment in Ukraine„, 22nd INPRO Dialogue Forum, International Atomic Energy Agency (IAEA), May 2024. Available at: https://nucleus.iaea.org/sites/INPRO/df22/Day%201/Europe-America/5.Ukraine.pdf.
[7] World-Energy. „Holtec Inks Agreement for up to 20 SMRs in Ukraine.“ April 26, 2023. Available at: https://www.world-energy.org/article/31852.html.
[8] See supra note 2, pp. 137 ff.
[9] See supra note 2, pp. 137 ff.
[10] See supra note 2.
[11] Available at: https://comindis.com/wp-content/uploads/2022/01/20220119_FIDIC_Greenbook.pdf.
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