Spotlight on Ukraine's post-war reconstruction project

Global infrastructure investment expected to increase; US (IIJA), Canada, India, etc.

Ukraine reconstruction project to reach $1 trillion... largest since World War II
Increased interest in infrastructure investment from major countries around the world ... U.S. (IIJA), Canada, India, etc.

With the possibility of a Russian-Ukrainian ceasefire on the horizon, there is growing interest in post-war recovery and reconstruction projects in Ukraine. In addition, it is a time of high interest in infrastructure investment globally.

The U.S. is increasingly focusing on infrastructure investment through the Infrastructure Investment and Jobs Act (IIJA), and Canada is expected to invest in construction, civil engineering, and other infrastructure in line with the U.S. IIJA.

India, Indonesia, etc. are expected to invest in infrastructure for economic growth and industrial base.

Construction, civil engineering, industrial facilities, defense, etc... Launch national reconstruction programs

Ukrainian President Volodymyr Zelensky says "$1 trillion needed to rebuild Ukraine"
Turkey most active in construction and civil works ... $1 billion, 70 projects in last two years
Territory occupied by Russia; about 18% ... war likely even with ceasefire or truce

We don't know if the actual size of the reconstruction project will be as large as the Ukrainian president says it will be - the $1 trillion figure is either maxed out or overestimated, and even half of that is a significant amount.

It is impossible for the Ukrainian government to cover all of it. It will most likely come through loan programs from the European Bank for Reconstruction and Development or help from the international community.

Already, according to Bloomberg, Turkish construction and civil engineering firms have committed about $1 billion and more than 70 construction and civil engineering projects, even during the war, to rebuilding Ukraine, repairing bridges and roads, providing generators, mobile hospitals, and more.

Germany is combining infrastructure and defense assistance. Rheinmetall AG is offering a model of reconstruction that could work for Ukraine, with plans to set up a venture to manufacture 155mm artillery shells in the country.

In addition, companies from South Korea, the United Kingdom, Denmark, Hungary, and other countries are interested in reconstruction, either directly or indirectly, and as soon as the end of the Russian-Ukrainian ceasefire negotiations is confirmed, more pro-Western and liberal countries are likely to get involved in Ukraine's reconstruction.

What are the biggest obstacles to rebuilding Ukraine?

Will US support for Ukraine continue after Trump's election?
Ukraine, the fight against corruption and the possibility of a protracted war?

In the nearly three years since the Russian-Ukrainian war, the Biden administration has been active in supporting Ukraine, while the Republican Party has been relatively lukewarm, and has been reluctant to support Ukraine. If Trump is elected, the amount of support for Ukraine could decrease significantly.

Ukraine is fighting a war not only against Russia, but also against corrupt politicians and businessmen. With foreign aid funding the war, corruption is rampant, raising the possibility of continued engagement with Russia after the war ends or sabotage by pro-Russian forces on Ukrainian soil.

Defense a Rebuilding Business?

The defense industry can also be considered a reconstruction project, as Germany's Rheinmetall is preparing to set up a venture in Ukraine to produce 155mm artillery shells. Complementing the supply chain to produce and distribute war materials may be Ukraine's biggest challenge.

Russia is a self-sufficient country, and Ukraine is not, and in the event of a protracted war between the two countries, Russia would have the advantage. To counter the possibility of further Russian aggression, Ukraine may look to supply chain management to maintain its wartime economic system.

Among domestic construction and civil engineering companies, those with a competitive edge in special purpose buildings (energy, manufacturing, etc.) will be at an advantage, and we expect them to secure a relatively high share of Ukraine's reconstruction projects.

Infrastructure investments will see increased interest globally ... US, Canada, India, Indonesia, etc.

The U.S. is likely to continue to see construction, civil works-related projects under the Infrastructure Investment and Jobs Act. Infrastructure investment in the U.S. is likely to have an impact on Canada. The US is likely to focus on transportation (roads, ports, railways, etc.) and grid (power infrastructure, etc.) projects, while Canada is likely to prioritize housing projects.

India and Indonesia are likely to invest to make their manufacturing supply chains more competitive.

In the past, construction and civil engineering projects have been centered on China, but now we expect infrastructure investment to be centered on developed countries and countries with economic growth.

THOTH Investments is preparing a report on the US Infrastructure Investment and Jobs Act (IIJA), focusing on the transportation sector (Transportaion) and rail sector (Passenger and Freight Rail). In the near future, we will produce and release reports suitable for US stocks and US ETFs.

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