Ukraine seeks €7bn for power recovery as allies expand air-defence cooperation

Ukraine is seeking around €7bn in investment to rebuild and expand its electricity generation capacity after Russia intensified attacks on the country's energy infrastructure this year, while Kyiv and its Western partners are simultaneously stepping up efforts to strengthen air-defence production and military assistance, reported Ukraine Business News.

The parallel developments underscore how protecting and rebuilding Ukraine's energy system has become increasingly intertwined with expanding domestic and allied defence manufacturing as Russian missile and drone strikes continue to target critical infrastructure.

Vitaliy Zaichenko, chairman of state grid operator Ukrenergo, said the number of Russian attacks on Ukraine's energy infrastructure had increased by 36% in 2026 compared with the first half of last year.

According to Zaichenko, Russia has also altered its tactics, increasingly deploying coordinated swarms of 20 to 25 drones against individual energy facilities in an effort to overwhelm Ukrainian air defences and inflict greater damage on electricity infrastructure.

"The pressure on the energy system continues to grow," he said.

Zaichenko estimated Ukrenergo's direct losses from the war at nearly UAH90bn ($2.2bn), while lost revenue since the beginning of 2026 has reached approximately UAH4bn.

Ukraine has already lost about half of its electricity generation capacity since the war began in February 2022, with flexible generating facilities among the hardest hit.

To restore and modernise the system, Ukraine plans a significant expansion of new generating capacity by the end of the decade. Officials aim to increase battery energy storage capacity to 5 gigawatts by 2030, expand gas-fired generation to 2 GW, boost installed solar capacity to 10 GW and raise wind generation to 6 GW.

Ukraine is also preparing a new tender for additional generation projects across several regions. Planned developments include 250 megawatts in the Kyiv and Chernihiv regions, 872 MW across the Sumy, Kharkiv and Poltava regions, 283 MW in the Dnipropetrovsk region and another 100 MW in the Odesa region.

Energy Minister Denys Shmyhal said Ukraine has already commissioned 8 GW of distributed gas-fired generation, with additional projects currently under development.

As Ukraine works to rebuild its power sector, it is also seeking to strengthen the country's ability to defend critical infrastructure from continued Russian attacks.

President Volodymyr Zelenskiy said Ukraine and several European partners will soon hold their first international meeting in France to launch practical cooperation on joint production of the FREYA anti-ballistic missile system.

The project, being developed by Ukrainian defence company Fire Point together with partners in Germany, France, Norway and Sweden, is intended to become a lower-cost European alternative to the U.S.-made Patriot air-defence system.

The FREYA system is centred on the FP-7.x interceptor missile, which developers estimate could cost less than $1mn per launch, substantially below the cost of Patriot interceptors.

Zelenskiy also said Ukraine would soon receive another US military assistance package that includes additional Patriot missiles, while further deliveries of PAC-3 interceptors are expected from European partners.

The Ukrainian president added that Kyiv and Washington had reached agreement "at the leadership level" on localising Patriot missile production in Ukraine, although defence analysts caution that establishing such manufacturing capacity is likely to take at least a year because of technology-transfer requirements, supply-chain development and security considerations.

US Congressman Michael McCaul, a member of the House Foreign Affairs Committee, said American defence manufacturers, including Lockheed Martin, were interested in Ukraine's missile-production capabilities.

"I think that Ukrainians can create this faster, and maybe even better," McCaul said, suggesting US companies could also benefit from Ukrainian battlefield experience in improving missile production.

Support from European allies, however, remains uneven.

Germany's parliament rejected a proposal from the Greens that called for the immediate transfer of Taurus long-range cruise missiles to Ukraine, increased production of PAC-2 Patriot ammunition and expanded Ukrainian long-range strike capabilities.

Chancellor Friedrich Merz argued Ukraine already possessed long-range weapons that were "much more effective" than the relatively limited number of Taurus missiles Germany could provide.

At the same time, Berlin has continued expanding support in other areas. Germany is financing the purchase of 50,000 Shrike first-person-view attack drones manufactured by Ukrainian company SkyFall and equipped with autonomous targeting software developed by US defence technology firm Auterion, in one of the largest known Western drone procurement programmes for Ukraine.

Meanwhile, Polish Defence Minister Władysław Kosiniak-Kamysz said negotiations over transferring Soviet-era MiG-29 fighter aircraft to Ukraine were progressing positively and nearing agreement, although he said Kyiv or supporting allies would need to finance any modernisation work required before delivery.