Rebuilding Ukraine Series – Ready for the rebuild: potential hurdles to consider

Over recent years, Ukraine’s construction industry has faced various social, economic and political challenges including conflict, COVID-19 and materials shortages. With recent reports of potential peace negotiations however, attention is starting to shift to rebuilding the country.

Earlier articles in our Rebuilding Ukraine Series have explored the core issues connected with procurement; contract conditions; funding; insurance; and other investment opportunities (including the EU’s Call for Expressions of Interest). This update examines some key risks, legal considerations and frameworks, and potential strategies for contractors and consultants to consider as part of their future involvement in the reconstruction and recovery efforts.

Construction opportunities and challenges in Ukraine

As explained in our last update, the conflict in Ukraine has resulted in extensive damage to the country’s infrastructure, housing, and essential services. The need for reconstruction becomes increasingly urgent as the war continues.

The reconstruction of Ukraine presents opportunities for businesses to secure contracts involving complex and prominent projects. Likely areas of focus or project types may span transport and infrastructure reconstruction; residential projects; commercial and industrial rebuilding; energy; sustainable construction; debris clearance and management; and demolition.

Although these areas offer major prospects for construction, engineering, and infrastructure businesses, they also pose the following potential challenges and risks.

• Public procurement: the reconstruction efforts may face challenges in the form of navigating public procurement, including managing potential corruption risks and lengthy procedures in an efficient manner. The use of legal and institutional frameworks, ensuring transparency, and promotion of equality for domestic and foreign businesses will be important. Some organisations have suggested that procurement practices should be aligned with internationally recognised standards to increase interest and efficiency.

Businesses will need to understand the applicable procurement processes and take appropriate steps to comply with them when tendering for opportunities. Additional time should be factored in for actions to complete necessary documentation and certification.

• Risk mitigation: businesses should consider applicable legal, commercial and operational measures for managing risks related to post-conflict areas, together with any remaining political instability and supply chain disruptions. It is therefore recommended that such contract opportunities go thorough appropriate internal due diligence and corporate governance checks, not least to consider the resilience and approach to supply chains, security and stability, and other health and safety requirements. The ability to manage complex projects, and to budget and programme in challenging locations will also be important.
• Insurance and liability: ensuring adequate insurance coverage for employees, assets, and works will be crucial, especially in areas impacted by conflict. Businesses must carefully consider any applicable exclusions and limitations in their insurance policies and reflect these requirements in contracts agreed.
• Ground risk and site conditions: many sites in the country have experienced damage and intense shelling, raising the risk of unexploded ordinances and other unforeseen, dangerous conditions. Contractors/subcontractors would be well advised to proactively address these risks in their contract terms, pricing, and programmes.

• Legal and regulatory compliance: businesses will need to navigate the applicable regulatory landscape, which may involve different or multiple rules and requirements and increase administrative burdens as a result. Further, compliance with local national laws and regulations will be important when negotiating contract terms and conditions, managing client and supply chain relationships, and delivering projects in practice.

The future of construction law in Ukraine

Ongoing reforms

Looking ahead, we may see legislative and regulatory reforms in construction law to benefit the country, and to attract developers, contractors, consultants, insurers, and investors. The joint Rapid Damage and Needs Assessment (RDNA3) released by the Ukraine Government, the European Commission, the World Bank Group, and the United Nations last year highlighted the need for reforms to boost private sector involvement, ensure sustainable recovery, and integrate project planning into medium-term budget planning.

Future housing reform and modernisation are also anticipated since the Ukrainian Government adopted a bill on the Basic Housing Policy Framework in January 2025. The draft law must proceed through parliamentary approval, requiring successful voting and the President’s signature for final enactment. This legislation would likely be bolstered by a planned State Housing Strategy to establish policy directions, funding mechanisms and sources, performance indicators, and monitoring frameworks. Regional housing strategies would then be expected to align with the national framework to foster coordinated development across the country. At present, there are plans to implement further changes into the legislation in the last three months of 2025.

Potential impact of Ukraine’s EU integration

Although Ukraine is not currently a member of the European Union, it was granted official EU candidate status in June 2022.

Since then, the country has undertaken efforts to fulfil the required criteria for full EU membership, which includes alignment with EU standards and various reforms that may take several years to implement. Upon successful completion of this process, the Procurement Directives would become applicable to future contract opportunities and awards, potentially providing an advantage to European contractors and consultants. Nevertheless, depending on how these discussions evolve in the context of the reconstruction efforts, certain exceptions related to urgency and national security might still apply.

Furthermore, EU membership would impact Ukraine’s construction law, necessitating harmonisation with European standards and regulations.

Ensuring legal certainty

It will be important for Ukraine to create and maintain a stable and predictable legal environment, not least to reassure investors and construction firms in the long-term rebuilding process.

Creating a clear, unified legal framework aligned with international standards for the future procurement and award/implementation of contracts has been highlighted as key to streamlining tendering, reducing bureaucracy, improving contract management efficiency, and accelerating reconstruction efforts and resilience[1]. As noted above, businesses working in Ukraine on these contracts will need to understand the applicable law, and governing law, to ensure they comply with their obligations.

Concluding thoughts

The critical and extensive rebuilding of Ukraine will undoubtedly present construction, engineering, and infrastructure businesses with significant opportunities to secure rewarding and prominent contracts. However, they should be alive to the potential risks and challenges associated with working in a post-conflict area, as well as the overall impact of legal and regulatory frameworks that will support such initiatives. The rebuilding of Ukraine will be a complex and evolving process, but clearly businesses will want to be involved with helping to facilitate a resilient and prosperous future for the country.

Beale & Co has specialist expertise in advising on a range of projects, contracts and disputes internationally. We are supported by law firm contacts under Lexicom (a network of independent commercial law firms across Europe founded by Beale & Co) in advising on such matters. For more information on how Beale & Co can work with you to provide legal support on your contracts or projects, please contact Antony Smith or visit our website.

[1] OECD, Public procurement in the post-war reconstruction of Ukraine – main challenges, 8 August 2023