Infrastructure and Development Projects

Russia continues to funnel investment into infrastructure and development programs in occupied Ukraine in order to maximize the profit of its occupation. Kherson Oblast occupation senator Igor Kastyukevich stated in an interview with Kremlin newswire TASS on September 13 that Russia will allocate about 940 billion rubles ($11 billion) to occupied Ukraine under the Russian federal framework “Recovery and socioeconomic development of Donetsk, Luhansk, Kherson, and Zaporizhia oblasts” in 2025-2027.[12] The Russian government approved this framework in December 2023 and has since used it to facilitate construction and development projects in occupied areas that allow Russia to reap economic benefits from its occupation of these areas.[13] Russian Minister of Industry and Trade Anton Alikhanov met on September 15 with Donetsk People’s Republic (DNR) Head Denis Pushilin and reported that Russia intends to invest additional resources in 2026 to develop and restore industrial and technological enterprises in occupied Donetsk Oblast.[14] Pushilin noted during the meeting that his administration also intends to divide the territory of the Azovstal and Azovelektrostal factories in occupied Mariupol and transfer parts of these factories to Russian investors to create a future industrial park.[15] Both Azovstal and Azovelekstrostal were dominant Ukrainian economic assets prior to the full-scale invasion and suffered extensive damage during the Russian siege of the city in 2022.[16] Russia’s focus on revitalizing occupied Mariupol as an industrial hub is reflective of Russia’s desire to profit from Ukraine’s most lucrative industries to supplement its domestic economy, which is struggling due to the costs of Russia’s invasion of Ukraine.

The Kherson Oblast occupation administration is leveraging Russia’s de facto annexation of Belarus to secure additional funding for development projects. Kherson Oblast occupation head Vladimir Saldo met with Belarusian President Alexander Lukashenko in Minsk, Belarus, on September 15.[17] Lukashenko told Saldo that Belarus is ready to contribute in “every possible way” to the development of occupied Kherson Oblast, including in the agricultural sphere.[18] Saldo, in return, suggested that the Kherson Oblast occupation administration can provide Belarus with “part of its coastline” for the development of sanatoriums and tourist infrastructure.[19] The relationship between the occupation administration and Belarus is mutually beneficial to all Russian-linked entities– the Kremlin can use Belarus to offset some of the costs of maintaining its occupation by using Belarus as a proxy for implementing various development projects, Belarus can also reap some benefit off of Russia’s occupation of Ukraine, and the occupation administration cements its authority via its contacts with high-ranking Belarusian and Russian officials.