Linzi Hedalen, partner at Dentons, explains why Scotland’s expertise in developing and upgrading buildings can help transform war-damaged areas in Ukraine
FOLLOWING the invasion of Ukraine by Russia on 24 February 2022, Ukraine’s built environment has suffered catastrophic damage. The New York Times has previously reported that 210,000 buildings have been destroyed since the start of the war. Housing, hospitals, universities and schools have all been affected, as have infrastructure, energy, manufacturing and agriculture.
The most recent Rapid Damage and Needs Assessment (RDNA4), a survey assessing the damage from the war, calculated that the cost to rebuild Ukraine was US$524 billion, with US$13 billion being allocated to debris clearance and management alone.
This may seem challenging for some but, for others, including Ukraine, it is seen as an opportunity. Following the signing of a Memorandum of Understanding (MoU) between Scotland and Ukraine on 28 May 2025, Scotland and Scottish-based businesses alike should welcome and consider the prospects of this opportunity.
The MoU was signed as part of a broad partnership between the two nations, affirming Scotland’s commitment to support Ukraine through trade, investment and knowledge-sharing. The new MoU builds on a variety of collaborative agreements, such as the UK-Ukraine university twinning programme, green hydrogen cooperation between Hydrogen Scotland and the Ukrainian Hydrogen Council, cultural exchanges facilitated by the British Council and Creative Scotland, and the One Hundred Year Partnership Agreement between the UK and Ukraine.
So, what are the opportunities?
Housing
Ukraine has a desire to rebuild in a high-quality and sustainable manner, and with 13% of the housing stock in Ukraine damaged or destroyed, there is an urgent need for homes. The housing and utilities sector accounts for about 20% of the overall reconstruction costs and it is the case that whole communities will need to be rebuilt.
Scotland’s reputation for environmentally-friendly construction and advanced manufacturing puts it in a strong position to offer services for large-scale housing redevelopment. Companies that have expertise in developing, financing or project-managing large housing builds should consider the feasibility of expanding into Ukraine and working collaboratively with their Ukrainian counterparts. Additionally, businesses that develop modular homes, timber kits and insulation should also assess the benefits of exporting because the demand is clear.
Infrastructure
There is also the need for large infrastructure projects including schools, hospitals and universities. Through PPP/PFI frameworks, Scotland has delivered many schools and hospitals over the last 25 years.
Scotland’s expertise in developing and upgrading buildings can be scaled and replicated in war-damaged areas in Ukraine, with Scottish funders, asset managers, consultants, design teams, fabricators and contractors all having skills that can be shared or utilised in the transformation of Ukraine.
Energy
Since the beginning of the full-scale invasion, it has been reported that only 25% of Ukraine’s available power generation capacity remains operational, compared to pre-2022 levels. This is well below required levels. To rebuild the energy infrastructure, Ukraine is prioritising decentralised, secure and green energy, with aims to: reduce greenhouse gas emissions by 65% by 2030; achieve climate neutrality of Ukraine’s energy sector by 2050; and decentralise the energy infrastructure to reduce fragility in the sector. There is considerable potential for solar and wind energy in Ukraine. Additionally, Ukraine has a strategy to enter into the European hydrogen energy market.
As a global leader in renewable energy, generating 68% of its electricity from renewable sources, there is a clear play for Scotland to support widescale implementation of sustainable energy. Taking wind as an example, Scotland is home to a supply chain for components of the wind sector, with factories for the manufacturing and fabrication of cabling, blades, towers and bearings. Scotland’s offshore wind programme is advanced, mature and aggressive in pursuing new technologies which could benefit Ukraine’s renewable energy vision. With more than 50 renewable wind projects currently in development, with a total capacity of more than 7 GW, there is plenty of opportunity.
Conclusion
The signing of the MoU is an invitation to Scotland to come and do business in Ukraine, with Ukraine and for Ukraine. This article only gives a glimpse of the opportunities that could benefit Scotland’s construction and energy sectors. These industries, particularly ones that can scale and export internationally, should now be exploring both import and export of skills, expertise and materials, with a view to not only assisting a nation in need, but also to looking to boost jobs, revenue and skill sets, as well as tapping into the significant international funding that is being allocated for the rebuild of Ukraine.
With Dentons UK and Middle East LLP having a team of lawyers, including those with a construction and projects background, in both Scotland and Ukraine, we are uniquely placed to help Scottish businesses explore opportunities in this market.
