Korea to ramp up drive to win reconstruction projects in Ukraine next year

An emergency ministry official stands inside a destroyed shopping mall that was hit by recent shelling in the course of the Russia-Ukraine war in the town of Horlivka (Gorlovka) in the Donetsk region, Ukraine, Monday. Reuters-Yonhap

The Korean government and companies aim to step up efforts next year to join post-war reconstruction projects in Ukraine, although the ongoing war has made it difficult to commence projects this year, according to industry officials, Tuesday.

Last Thursday, the Ministry of Land, Infrastructure and Transport announced plans to spend 100 million won ($77,000) to requisition a six-month study on the current situation in Ukraine regarding reconstruction and strategies to participate in rebuilding works.

“When President Yoon Suk Yeol visited Kyiv in July, he promised that the government and companies will boost cooperation for Ukraine’s reconstruction, and a business delegation led by the land minister came up with more specific ways for the reconstruction (to proceed) during their meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv in September,” the ministry said. “For Korean companies to join the reconstruction projects, it is necessary to draw up strategies based on the understanding of fundraising methods and business structures.”

The ministry said it is also seeking advice on the participation of Korean companies in the reconstruction projects, while researching relevant laws to establish branches in Ukraine.

The Ministry of Trade, Industry and Energy is also expected to send a delegation to Ukraine next year to discuss cooperation in the energy and resource development sectors. The ministry had initially tried to send the delegation this year, but postponed the plan due to the continued fighting.

Earlier this month, Deputy Prime Minister and Finance Minister Choo Kyung-ho announced that the government will give $100 million to the Multilateral Development Bank and provide a $200 million humanitarian aid package next year for Ukraine’s reconstruction.

He also unveiled the government’s plan to form a $2 billion economic development cooperation fund in the long term, so that Korean companies can contribute to the reconstruction of Ukraine’s infrastructure and modernization of the country’s industries.

In line with the government’s plans, Korean companies are also accelerating efforts to gain a foothold in Ukraine and neighboring countries.

SG, a Korean asphalt concrete maker, decided last week to invest 9 billion won to establish a Ukrainian subsidiary. The company also signed a 12.5 million euro ($14 million) contract recently with Ukraine's DS Prom Group to supply asphalt by 2026.

“Since a delegation from Ukraine visited our company in October, we discussed cooperative projects,” SG CEO Park Chang-ho said. “With our technologies and products, we will support the rebuilding of Ukraine’s road network.”

Hyundai E&C, which signed a memorandum of understanding to rebuild Boryspil International Airport in Kyiv, is moving to set up branches in Ukraine and Poland. The construction company is expected to reinforce its team handling the reconstruction projects once organizational restructuring is completed.