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InvigoratEU Long Policy Report on rules alignment of protecting critical infrastructure in interdependent states (D7.1)

Vilpišauskas, Ramūnas; Potapkins, Sergejs; Chekunova, Svitlana; Jacimovic, Danijela; Kardava, Gocha; Siddi, Marco; Tabagua, Nana

Abstract

The report provides an extensive discussion of evolving landscape of threats to the CI in the EU and selected candidate countries in recent years and the challenges which, while varying depending on particular countries, also are common to all states affected by geopolitical tensions. The analysis of threats to energy, communications, transport and other CI in the Baltic States, Ukraine and the Baltic Sea region shows that hostile activities by authoritarian states, in particular, Russia, or actors linked to them have become increasingly frequent. Their proliferation especially intensified after Russia’s full-scale war against Ukraine in 2022, as it also became a wider confrontation between the West and authoritarian powers. The analysis of CI-related policies in Montenegro, Ukraine and Georgia – three candidate countries, which differ in terms of their state of accession into the EU, their connectivity patterns and risks to their CI associated with them – allows to assess different challenges arising to their CI and provision of vital services to society and state and methods of coping with them in each of them. The report concludes with recommendations emphasising the importance of daily practices of partnership and exercises involving all stakeholders of CI ecosystems and cooperation with the EU and NATO partners, taking into account different patterns of interdependencies and existing threats.

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ū š A* j^lnvigoratEU Invigorating Enlargement And Neighbourhood Policy For A Resilient Europe Long Policy Report on rules alignment of protecting critical infrastructure in interdependent states Authors Ram nas Vilpi auskas, Sergejs Po+apkins, Svitlana Chekanova, Danijela Jacimovic, Gocha Kardava, Marco Siddi, Nana Tabagua Funded by the European Union ū š Executive summary The report provides an extensive discussion of evolving landscape of threats to the Cl in the EU and selected candidate countries in recent years and the challenges which, while var¬ ying depending on particular countries, also are common to all states affected by geopo¬ litical tensions. The analysis of threats to energy, communications, transport and other Cl in the Baltic States, Ukraine and the Baltic Sea region shows that hostile activities by author¬ itarian states, in particular, Russia, or actors linked to them have become increasingly fre¬ quent. Their proliferation especially intensified after Russia's full-scale war against Ukraine in 2022, as it also became a wider confrontation between the West and authoritarian pow¬ ers. The analysis of Cl-related policies in Montenegro, Ukraine and Georgia - three candi¬ date countries, which differ in terms of their state of accession into the EU, their connec¬ tivity patterns and risks to their Cl associated with them - allows to assess different chal¬ lenges arising to their Cl and provision of vital services to society and state and methods of coping with them in each of them. The report concludes with recommendations empha¬ sising the importance of daily practices of partnership and exercises involving all stake¬ holders of Cl ecosystems and cooperation with the EU and NATO partners, taking into ac¬ count different patterns of interdependencies and existing threats. Authors Ram nas Vilpi auskas Professor Department of International Relations Vilnius University Svitlana Chekunova Research Associate The Razumkov Centre Sergejs Potapkins Research Associate Agora Strategy Group A Latvian Institute of international Affairs Danijela Jacimovic Professor Univerzitet Crne Gore Gocha Kardava Research Associate PMCG - Research Nana Tabagua Lead Researcher PMCG - Research Approved by: Marco Siddi Assistant Professor Finnish Institute of International Affairs Funda Tekin, Director Institute for European Politics, Scientific Lead, InvigoratEU Michael Kaeding, Professor for European Integration and European Union Politics at the Department of Political Science at the University of Duisburg-Essen, Germany, Project Coordinator, InvigoratEU About InvigoratEU InvigoratEU is a Horizon Europe-funded project, coordinated by the EU-Chair at the University of Duisburg-Essen (UDE) together with the Institut für Europäische Politik (IEP) in Berlin. The project, with a duration of 5 years from January 2024 until December 2026, examines how the EU can structure its future relations with its Eastern neighbours and the countries of the Western Balkans. The consortium has received around three million euros for this endeavour. DOI 10. 5281/zenodo. 17540020 License: This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4,0 Unported License. Disclaimer: Views and opinions expressed are however those of the authors only and do not neces¬ sarily reflect those of the European Union or the European Research Executive Agency. Neither the European Union nor the granting authority can be held responsible for them. Funded by the European Union About the project: www.invigorat.eu j^lnvigoratEU InvigoratEU | Policy Report Contents 1 Introduction 2 2 Literature review 5 The concept of critical infrastructure 5 From protection to resilience of critical infrastructure 5 Cross-border threats to critical infrastructure and the role of the EU and international organisations 7 5 Analysis of recent incidents and attacks on critical infrastructure 9 Cyber-attacks on critical infrastructure in the Baltic States 9 Objects and targets of cyber-attacks 9 The recent trends of cyber-attacks against Cl in the Baltic States 11 Actions to Strengthen Cyber security and Resilience of Cl 15 Attacks on critical infrastructure in Ukraine 17 Analysis of Kinetic Attacks on Energy Infrastructure 17 Cyber security as a critical element of Cl Protection in Ukraine 20 Lessons Learned from Incidents Targeting Critical Infrastructure 21 Incidents and attacks on critical infrastructure in the Baltic Sea 25 Concluding remarks and lessons learned 26 4 Overview of critical infrastructure policies in selected candidate countries 27 Montenegro 28 Evolving landscape of threats to critical infrastructure 28 Legislative framework and institutions involved in the critical infrastructure policies 29 Lessons and concluding remarks 31 Ukraine 52 Legislative framework and institutions involved in the critical infrastructure policies 52 Ukraine's energy integration with the EU 34 Lessons and concluding remarks 58 Georgia 59 Evolving landscape of threats to critical infrastructure 59 Legislative framework and institutions involved in the critical infrastructure policies41 Lessons and concluding remarks 45 5 Conclusions and recommendations 44 Bibliography/List of References 45 Appendix 1 55 Appendix 2 54 Appendix 5 60 1 j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe 1 Introduction InvigoratEU | Policy Report This policy report provides analysis of the debates on the protection and resilience of crit¬ ical infrastructure in the EU Member States and selected candidate countries. It aims to provide the basis for the assessment of the most recent trends and pathways forward in the search for effective policy and institutional solutions in terms of aligning approaches of the EU Member States and candidate countries. The focus on critical infrastructure (Cl) - assets that are essential for the functioning of society and economy - is grounded in the understanding of its increasing relevance for the security and resilience of the EU and candidate countries. As explained in the next chapter, in recent decades for a number of technological, geopolitical, environmental and other reasons there has been a growing attention of analysts and policy-makers dedicated to the protection and resilience of Cl such as energy, communications, transport and other which is considered vital for contemporary societies. Therefore, analysis of debates sur¬ rounding these issues is an important element in the holistic approach to strengthening Europe's resilience and invigorating enlargement and neighbourhood policy for a resilient future. The report starts with the presentation of the scholarly debates and policy trends related to the protection and resilience of Cl. First, the main concepts as well as trends, in particular the shift in focus from protection to resilience and adoption of all-hazard approach are discussed. Then it outlines the rationale for the cross-border cooperation in this field as well as other methods of increasing resilience of Cl entities such as private and public partner¬ ships, sharing of information and institutional roles. After outlining the practices for enhancing Cl resilience, the report investigates the most recent incidents and attacks on the Cl of the EU Member States and candidate countries, including cyber-attacks in the Baltic States, cyber and kinetic attacks in Ukraine against energy, transport and communications infrastructure, and incidents and suspected sabo¬ tage against energy and telecommunications infrastructure under the Baltic Sea connect¬ ing the countries around it. The purpose of these analyses is to show the evolving nature of the current challenges facing the EU, its Member States and candidate countries, the importance of protecting Cl and the lessons learned with respect to enhancing protection and resilience of their Cl. The Baltic States have been chosen due to their geographical position and recent experiences in diversifying away from aggressive authoritarian neighbours to increase their interde¬ pendencies in energy, transport and other sectors with EU/NATO partners and upgrading their Cl-related policies. In response to cyber attacks attributed to Russia, the Baltic States have developed their cyber security policies which can be considered good practices hav¬ ing lessons for current candidate countries. Meanwhile, hybrid and kinetic attacks against Cl in Ukraine illustrate both the challenges experienced by this candidate country and the methods of responding to them and (re)building capacity which can be useful to other European countries. 2 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe In addition, the report zooms into three candidate countries - Montenegro, Ukraine and Georgia - to assess the state of the debates on protection and resilience of Cl there. The countries selected represent three different cases in terms of their state of integration into the EU, the patterns of interdependencies and the actual threats to their Cl. On the basis of desk research and exploratory interviews, it presents the main trends in the current de¬ bates on Cl related policy issues, the main challenges and actual practices compared to those which are considered good practices by the OECD and other international organi¬ sations. It also investigates policy conflicts between the EU's integration-driven demands and interdependencies with authoritarian countries and other factors which inhibit the en¬ hancement of resilience of Cl entities in line with best practices. The report concludes with general observations on the key trends in terms of evolving threats to the Cl of EU members and candidate countries, current challenges related to its protection and resilience as well as policy recommendations. 2 Literature review The concept of critical infrastructure The public attention to the infrastructure considered particularly important for the function¬ ing of state and well-being of society could be traced back to the Ancient Roman times (i.e. protection of aqueducts and roads used for dual purpose). However, in modern times it was in the US that the public policy debate on the need to protect critical infrastructure initially emerged and soon expanded to other OECD countries. In 1990s, the Clinton administration introduced regulation aimed at outlining the set of ac¬ tions needed to protect critical infrastructure (Cl) which was defined as "those physical and cyber-based systems essential to the minimum operations of the economy and govern¬ ment".1 In the 2000s, the European Commission also took initiative to, first, present a Green Paper on a European Program for Critical Infrastructure Protection (17 November 2005), then followed by the Directive 2008/114/EC on the identification and designation of Euro¬ pean critical infrastructures and the assessment of the need to improve their protection. The Directive 2008/114/EC defined Cl as "an asset, system or part thereof located in Mem¬ ber States which is essential for the maintenance of vital societal functions, health, safety, security, economic and social well-being of people, and the disruption or destruction of which would have a significant impact in a Member State as a result of the failure to main¬ tain those functions".2 This legislation referred to Cl of European dimension, but it also trig¬ gered increasingly more EU Member States to identify their national Cl as well.5 1 The US Presidential Decision Directive PDD-65 quoted in Roberto Setola/Eric Luiijf/Marianthi Theocharidou: Critical Infrastructures, Protection and Resilience, in: Roberto Setola et al. (eds.) Managing the Complexity of Critical Infrastructures. A Modelling and Simulation Approach. SpringerOpen, 2016, p. 2. 2 Council Directive 2008/114/EC of 8 December 2008 on the identification and designation of European criti¬ cal infrastructures and the assessment of the need to improve their protection (text with relevance to EEA), available at https://eur-lex.europa.eu/eli/dir/2008/114/oj/eng (last accessed: 10.01.2025). 5 Roberto Setola/Eric Luiijf/Marianthi Theocharidou: Critical Infrastructures, Protection and Resilience, 2016. 5 ž ū A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe During the last two decades policy initiatives on both national and EU levels proliferated aiming at protecting Cl and increasingly focusing on strengthening its resilience. The EU introduced new legislation that expanded the range of sectors, services and type of critical entities covered by supranational norms and replaced earlier directives.4 Although initially EU legislation on Cl applied to energy and transport sectors, gradually its scope was en¬ larged to include many other sectors and essential services such as information and elecommunications, financial services, health care, food and others. Meanwhile in addition to adopting supranational norms, EU Member States have been developing national policy measures, often linked to a changing landscape of perceived threats to national security.5 A number of factors explain the increasing importance of protecting Cl and in turn higher levels attention paid by policy-makers and experts to developing measures aimed at pro¬ tecting Cl and enhancing its resilience. Initially those factors included: policy driven changes in regulatory environment, such as unbundling of power generation, transmission and distribution in the electrical power sector, liberalisation of telecommunications and other formerly state-owned monopolies; technological developments, in particular, spread of information and communication systems, advances in the use of internet and smart phones, etc.; economic factors such as growing cross-border exchanges and diffusion of ideas and policy paradigms such as smart grids, smart cities, cooperation between private and public actors and shifting focus on resilience in addition to or rather than protection (the latter trend is discussed in more detailed below).6 At the same time, the growing number of incidents due to malfunctioning of increasingly complex systems and extreme weather events, as well as malicious activities such as cyber¬ attacks, terrorism and other types of hybrid attacks, focused policy makers' attention on the search for methods of preventing and mitigating the disruptive effects on the functioning of Cl. In particular, Europe became a playground of authoritarian powers, such as Russia, Belarus, China and North Korea, testing the functioning of Cl in the EU Member States and candidate countries through cyber-attacks and sabotage in addition to disinformation, or¬ chestrating illegal migration flows and other instruments of hybrid attacks. Following the full-scale Russian invasion of February 2022, Ukraine also experienced kinetic attacks on its Cl, especially energy infrastructure. Rising geopolitical tensions led many European democracies to introduce new rules and safeguards with respect to the ownership, foreign investment screening, restricting the use of foreign technologies, assigning institutional roles and upgrading routines aimed at reg¬ ular exercises involving private actors and institutions from partner countries, performing risk management and assessing potential vulnerabilities. 4 For the up-to-date list of EU's legal initiatives see the relevant site of the European Commission: Critical in¬ frastructure resilience at EU-level, 23 September 2024, available at https://home-affairs.ec.europa.eu/policies/internal-security/counter-terrorism-and-radicalisation/protection/critical-infrastructure-resilience-eulevel_en (last accessed 10.01.2025). 5 For the evolution of Cl policies in the Baltic States see Maris And ans/Andris Spr ds/Ulf Sverdrup (eds.): Critical Infrastructure in the Baltic States and Norway: strategies and practices of protection and communica¬ tion, Latvian Institute of International Affairs, 2021. 6 See Roberto Setola et al. (eds.) Managing the Complexity of Critical Infrastructures. A Modelling and Simu¬ lation Approach, 2016. 4 ū š A InvigoratEU | Policy Report ^^InvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Finally, as a sign of acknowledging the importance of adapting Cl policies to real world developments, national and EU funding for research related to protection of Cl and en¬ hancing its resilience, often also linked to the crises management analysis, has been on the rise.7 From protection to resilience of critical infrastructure One of the most noted shifts in the paradigm of Cl protection in recent decades among the OECD countries, led again by the US, was a growing focus on increasing resilience related to the acknowledgement that, due to the adverse and changing landscape of hazards and threats to Cl and provision of vital services, complete protection - foreseeing, preventing, preparing or mitigating those events - is not realistic. This could be considered a reflection of the broader "resilience turn" and living under "the permanent state of adaptation".8 More concretely, it has been argued that due to occur¬ rence of environmental disasters, growing frequency of terror attacks and other hostile ac¬ tivities causing disruptions of vital services and threatening our way of living and our very existence, we "must learn to be more resilient in the face of an unknown and unpredictable future".9 In the EU's Global Strategy adopted in 2016, resilience has been defined as "the ability of states and societies to reform thus withstanding and recovering from internal and external crises".10 Initially resilience referred to being able to bounce back from disruption and return to normality as quickly as possible, while more recently it was replaced by bouncing forward to a new normal and putting in place plans for coping with risks that cannot be accurately predicted in advance.11 Holistic approach to resilience situates it within the context of broader connectivity and market integration, and it includes societal and state resilience. The application of a resil¬ ience-focused approach to the functioning of Cl and provision of vital services starts from stating the fact that different critical infrastructures are closely linked and dependent on each other and it is this interconnectedness, complexity and 'system of systems' networking which directs attention to its resilience. Increasing attention to complex and intertwined risks and the cascading effects of a breakdown in one system on other networked systems should lead to a proactive response in terms of risk management. This would allow assessing the ability of complex infrastructure systems to maintain function safely, adapt, and recover 7 Roberto Setola/Eric Luiijf/Marianthi Theocharidou: Critical Infrastructures, Protection and Resilience, 2016. Also see European Commission: European Reference Network for Critical Infrastructure Protection: ERNCIP Handbook 2018 edition, Joint Research Centre Technical report, 2018, and European Commission activities on Critical Infrastructure Protection in the EU Science Hub, available at https://joint-research-centre.ec.europa.eu/scientific-activities-z/critical-infrastructure-protection_en (last accessed 10.01.2025). 8 The origins of the resilience approach are often attributed to the book by German sociologist Ulrich Beck: Risk Society: Towards a New Modernity, published in German in 1986 and translated into English in 1992 by Sage Publications. For more recent studies see Jon Coaffee: Future Proof. How to Build Resilience in an Uncertain World, Yale University Press, 2019; Markus K. Brunnermeier: The Resilient Society, Endeavor Literary Press, 2021. 9 Jon Coaffee: Future Proof. How to Build Resilience in an Uncertain World, 2019, p. 5. 10 European External Action Service: European Union Global Strategy, 2016, p. 25. 11 For a more extensive discussion of the concept of resilience and its use in the EU, its enlargement and neigh¬ bourhood policies see Hannah Brandt/Funda Tekin/ Pol Bargues, Ram nas Vilpi auskas: Growing Resilient To¬ gether: Reshaping EU Enlargement and Neighbourhood Policy in a Geopolitical Era, InvigoratEU Conceptual Background Paper, 2024, available at https://invigorat.eu/invigorateu-publications/ (last accessed 11.01.2025). 5 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe from disruption as quickly as possible.12 A resilience-based approach encompasses both elements of protection and adaptation deployed at various points during disruption or cri¬ sis. Thus, "resilience is considered as the capacity of a critical infrastructure and its operative environment to combat in a preventive and adaptive manner adverse conditions resulting from a disruption or disaster, to mitigate possible impacts and to recover itself largely in¬ dependently from the negative effects of the disturbance".13 In other words, resilience "refers to 'before, during and after' the unwanted event or disrup¬ tion of the Cl, thus covering the whole crisis management cycle".14 As pointed by the authors who, while acknowledging the definitional ambiguity and theoretical nature of the concept, proposed methods to apply resilience in practice, four characteristics are often used to describe the nature of resilience in Cl (the system as well as its components): robustness (resistance to a loss of function in the event of shock), redundancy (the level of substituta¬ bility to maintain the functional service), resourcefulness (the ability to direct resources for the increase in robustness in the event of shock), and rapidity (the restoration of function¬ ality in a timely manner).15 Another way of approaching the issue of Cl resilience is to use the 'resilience triangle' which refers to societal, organisational and technological domains.16 Thus, societal resilience fo¬ cuses on the effects of Cl disruption on vital societal functions of affected community, organisational resilience refers to the crisis management on organisational and inter-or¬ ganisational levels, including, preparedness, response capacity, communication, etc., and technological resilience is about the robustness, adaptability, redundancy, restoration and recovery capacity of the facility.17 Studies exploring the Cl disruptions as a crisis leadership challenge provide additional insights into the debates on organisational resilience of Cl.18 Focus on resilience, flexibility and agility of Cl operators leads to calls for advancing col¬ laborative processes and practical efforts to foster cooperation between citizens, private actors and all levels of governance institutions as well as between allies within NATO/EU which have been noticeable, for example, in cyber security policies of many OECD coun¬ tries. It also points to the importance of advancing the processes best suited to a particular context rather than modelled projections. This puts additional weight on the importance of timely information sharing between infrastructure operators, state institutions and other 12 Jon Coaffee: Future Proof. How to Build Resilience in an Uncertain World, 2019, p. 95-97 . 15 Jon Coaffee: Future Proof. How to Build Resilience in an Uncertain World, 2019, p. 110. 14 Christer Pursiainen: The Crisis Management Cycle, Routledge, 2017, cited in Christer Pursiainen/Eero Kytomaa: From European critical infrastructure protection to the resilience of European critical entities: what does it mean? In Sustainable and Resilient Infrastructure, 8 (1), 2022, p. 87. 15 Tim Prior: Measuring Critical Infrastructure Resilience: Possible Indicators, Risk and Resilience Report 9, Cen¬ tre for Security Studies (CSS), ETH Zurich, 2014, p. 5. 16 Michel Bruneua at el.: A Framework to quantitatively assess and enhance the seismic resilience of communi¬ ties, 2005, cited in Christer Pursiainen/Eero Kytomaa: From European critical infrastructure protection to the resilience of European critical entities: what does it mean? In Sustainable and Resilient Infrastructure, 8 (1), 2022, p. 88. 17 Christer Pursiainen/Eero Kytomaa: From European critical infrastructure protection to the resilience of Euro¬ pean critical entities: what does it mean? In Sustainable and Resilient Infrastructure, 8 (1), 2022, p. 88. 18 Eric Stern/Brian Nussbaum: Critical Infrastructure Disruption and Crisis Management, Oxford Research En¬ cyclopedia of Politics, 2022. 6 ā ā ī Ī Ā ā A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe authorities.41 CERT.LV also investigated the activities of Russian Internet trolls in the com¬ ment sections of Latvian news portals, where they used provocative comments to spread links that were used to infect users' computers.42 Shortly after the start of Russia's full-scale war in February, 2022, several groups of pro¬ Kremlin hacktivists became active. Their target was not only Ukraine but also many countries supporting Ukraine, including Estonia, Finland, Latvia, Czech Republic, Romania, Poland, and others. The range of targets of DDoS attacks in different countries has been generally the same: ministries, government agencies, critical electronic services, the transportation sector, banks, and the media. Often waves of DDoS attacks were caused by a country making a political decision in support of Ukraine, for example, declaring Russia a state sponsor of terrorism.45 After Russia attacked Ukraine, the number and intensity of cyberattacks in the Baltics in¬ creased significantly. In its public report for 2022, the Latvian Constitution Protection Bu¬ reau (SAB) indicated that 2022 saw the most intense cyber-attacks in Latvian cyberspace. The number of cyber-attacks tended to increase and had a wave-like character. In the public administration sector, the search for vulnerabilities in IT systems increased 7 times, and the total volume of attacks increased 4 times. According to SAB, Russia was the source of most cyber threats. According to data collected by CERT.LV, increased cyberattack ac¬ tivity was observed even before Russia invaded Ukraine in February. The number of attempts to invade Latvian infrastructure has increased significantly since February. The cyberattacks came in waves, peaking in May and August, which was associated with Latvia's political decisions to support Ukraine in various ways.44 In response to public and political calls to dismantle the Soviet monument in Victory Park, hacktivist groups such as "Killnet", which support the aggressive Russian regime, conducted intensive DDoS attacks on Latvian infrastructure. Although these attacks were large-scale, they were characterized as hooliganism and mostly had no tangible consequences. The exception was organizations that are not usually the target of DDoS attacks and have low levels of preparedness and protection, such as the charity organization Ziedot.lv, which helped raise funds for the demolition of a monument in Victory Park and support of Ukraine.45 Similar trends have been observed in Estonia. In its 2022 report, CERT Estonia stated: "The volumes of the attacks were sometimes more than a hundred times higher than in 2007, when, after the removal of the Bronze Soldier monument, our eastern neighbour disrupted 41 CERT.LV: Publiskais p rskats par CERT.LV uzdevumu izpildi, January 2016, p. 11, available at: https://www.cert.lv/uploads/parskati/CERT.LV_gada_parskats_2015.publ.pdf (last accessed 10.05.2025) 42 CERT.LV: Publiskais p rskats par CERT.LV uzdevumu izpildi, p.13, January 2016, available at: https://www.cert.lv/uploads/parskati/CERT.LV_gada_parskats_2015.publ.pdf (last accessed 10.02.2025) 45 RAI EE: Cyber Security in Estonia 2025, January 2024, available at https://www.ria.ee/sites/default/files/documents/2023-02/Cyber-Security-in-Estonia-2023.pdf (last accessed 10.02.2025) 44 Latvijas Republikas Satversmes Aizsardz bas Birojs: SAB 2022. GADA DARB BAS P RSKATS, p.32, 2023, available at: https://www.sab.gov.lv/files/uploads/2023/07/2022_parskats.pdf (last accessed 10.02.2025) 45 CERT.LV: 2022. gads Latvijas kibertelp , January 2023, available at: https://www.cert.lv/lv/2023/01/2022-gads-latvijas-kibertelpa (last accessed 09.02.2025) 13 ī ā A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe the work of our e-services and thereby our daily life with mass requests."46 One of the larg¬ est and most noticeable side effects of the full-scale invasion of Ukraine was a fourfold increase in DDoS attacks. Back in 2022, activity on this front seemed frequent and rapid, but in 2025 broke the previous record. 484 DDoS attacks were recorded, which was 60% more than in 2022. More DDoS attacks were reported in just one month than in the entire year before Russia launched its offensive on Ukraine. Only 159 attacks - less than a third - had consequences. Typically, the damage was limited to a short period of downtime or a slow response time of a website or service, but in some cases were more serious. The most notable was an attack that interrupted online sales of train tickets and the operation of payment terminals on trains for a day.47 In November 2022, the electronic channels of Eesti Energia, including the Elektrilevi network company, were attacked. The website and mobile application of Eesti Energia and the website and mobile application of Elektrilevi AAARU were affected. According to the State Infosystems Department, attacks by pro-Kremlin criminals targeted also companies and agencies in Latvia, Poland and Ukraine. The Ministry of Economy, the Bank of Estonia and EAS were also attacked.48 In 2022, the Lithuanian NCSC's Incident Response Team (CERT-LT) registered a total of 4,080 cyber incidents, which was similar to the 2021 figure. However, the NCSC noted an increase in the number of DDoS attacks. At the end of June 2022, the NCSC recorded a massive wave of DDoS attacks targeting the public and private sectors. According to pub¬ licly available information, the attacks were directed at 150 publicly accessible websites. A pro-Russian hacker group claimed responsibility for the attacks.49 Overall, the intensity of cyber-attacks continued to increase in 2025 and 2024, with new trends emerging: private devices such as WiFi access points and Internet of Things (loT) devices are increasingly being used to carry out cyber-attacks. There has also been a trend of cyber-attacks on software companies. After gaining access to the computer networks of these companies, attackers then attempt to gain access to the computer networks of their customers, who are often government agencies.50 As in the past, the greatest threat to Latvia in 2024 was posed by Russian intelligence hacker groups. At the same time, Lat¬ vian State Security Service recorded significantly less interest in Latvia from Chinese intel¬ ligence hacker groups. 46 RIA.EE: Cyber Security in Estonia 2023, p.10, January 2024, available at: https://www.ria.ee/sites/default/files/documents/2023-02/Cyber-Security-in-Estonia-2023.pdf (last accessed 10.02.2025) 47 RIA.EE, Cyber security in Estonia 2024, p.10, January 2025, available at: https://www.ria.ee/sites/default/files/documents/2024-02/Cyber-security-in-Estonia-2024.pdf (last accessed 10.02.2025) 48 ERR. EE: Pro-Kremlin cybercriminals attack Eesti Energia, 19 Nov. 2022, available at: https://rus.err.ee/1308794218/prokremlevskie-kiberprestupniki-atakovali-eesti-energia (last accessed 10.02.2025) 49 e Ministry of National Defence of the Republic of Lithuania: Key Trends And Statistics Of The National Cyber Security Status Of Lithuania 2022, 01 June 2023, available at: https://www.nksc.lt/doc/en/2022_keytrends-and-statistics-of-cyber-security.pdf (last accessed 10.02.2025) 50 Latvijas Republikas Satversmes Aizsardz bas Birojs: SAB 2023 Gada p rskats, January 2024, available at: https://www.sab.gov.lv/files/uploads/2024/02/SAB-2023.gada-parskats_LV.pdf (last accessed 10.02.2025) 14 ī ā A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe The year 2024 brought other cybersecurity challenges: during the November cold snap, the conflict between Israel and HAMAS affected Estonia - a cyberattack on Israeli-made pro¬ grammable logic controllers disrupted local Estonian heating and pumping stations. 51 Actions to Strengthen Cyber security and Resilience of Cl To mitigate digital security risks and to build resilience to cyber-attacks, it is necessary to strengthen the ability to use technology solutions prudently and acquire IT literacy, or selfdefence skills in the face of cyber security challenges. Established in 2018, EU Cyber Rapid Response Teams and Mutual Assistance in Cyber Se¬ curity (CRRTs), coordinated by Lithuania, is considered among the most successfully devel¬ oping and advanced PESCO projects. One of the key activities of a EU CRRT is its constant development through refinement of the procedures and practices applied in the capability. Currently a CRRT comprises 8-12 cybersecurity experts delegated at national level by eight EU member states - Belgium, Croatia, Estonia, Lithuania, Netherlands, Poland, Romania, Slovenia. The team is capable of offering assistance in managing a cyber-incident or car¬ rying out prevention (vulnerability assessments, elections observation, etc.).52 In 2022, the security of the supply chain of Lithuanian contractors continued to be strength¬ ened, Lithuania started preparing the National Cyber Security Development Program and adopted a description of procedures governing the availability and recovery of state infor¬ mation resources. In 2022, Lithuania adopted legislation to ensure that Cl entities, includ¬ ing 5G infrastructure, use equipment only from trusted manufacturers. Amendments were adopted to the Law on Public Procurement, the Law on Procurement of Customers Oper¬ ating in the Sectors of Water Supply, Energy, Transport and Postal Services, and the Law on Procurement in the Defence and Security of the Republic of Lithuania.55 In March 2025, the Latvian Cabinet of Ministers approved the draft strategy "Latvian Cyber Security Strategy 2025-2026" developed by the Ministry of Defence. On September 1, 2024, the National Cyber Security Law came into effect, which imposes stricter require¬ ments on companies, including the preparation of an organizational security self-assess¬ ment and the appointment of a cybersecurity executive. The Act transposed the require¬ ments of Directive (EU) 2022/2555 of the European Parliament and of the Council of De¬ cember 14, 2022, establishing measures to achieve a single high level of cybersecurity throughout the Union. In addition to the requirements of Directive, the National Cyber Se¬ curity Law will also apply to critical information and communication infrastructure super¬ vised by the SAB.54 51 RIA. EE, Cyber Security in Estonia 2024, January 2025, available at: https://www.ria.ee/sites/default/files/documents/2024-02/Cyber-security-in-Estonia-2024.pdf (last accessed 10.02.2025) 52 Ministry of National Defence of the Republic of Lithuania: Lithuanian-coordinated EU Cyber Rapid Response Teams - incident response with the EU and in support of EU partners and military missions, 30 March 2023, available at: https://kam.lt/en/lithuanian-coordinated-eu-cyber-rapid-response-teams-incident-responsewith-the-eu-and-in-support-of-eu-partners-and-military-missions/ (last accessed 10.02.2025) 55 Ministry of National Defence of the Republic of Lithuania: Key Trends and Statistics of The National Cyber Security Status of Lithuania 2022, 1 June 2023, available at: https://www.nksc.lt/doc/en/2022_key-trendsand-statistics-of-cyber-security.pdf (last accessed 10.02.2025) 54 Latvijas Republikas Satversmes Aizsardz bas Birojs: SAB 2023 Gada p rskats, January 2024, available at: https://www.sab.gov.lv/files/uploads/2024/02/SAB-2023.gada-parskats_LV.pdf (last accessed 10.02.2025) 15 ā ā ī ā ā ā ā ā ī ē ī ā ā ī ā š īč A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Latvia's cooperation with NATO allies in joint cyber threat hunts to detect the presence of adversaries in Latvia's Cl systems can also be considered a success story. Such joint oper¬ ations have been conducted since 2022. In 2023, a joint Latvian-Luxembourg team placed 4th out of 24 teams in Locked Shields 2023, the world's largest and most complex cyber defence exercise. 2023 also saw the launch of a coordinated vulnerability disclosure process in public ad¬ ministration, allowing agencies to voluntarily register their resources on the vulnerability reporting platform CERT.LV.55 According to CERT.LV, "Latvia is a leader in organizing and conducting threat search op¬ erations in the EU. Other European and NATO partner countries are also learning and gain¬ ing new experience from Latvian experts. Effective cooperation with representatives of the public administration infrastructure, as well as with security institutions in Latvia, is a major factor in successful results. By the end of 2023, threat hunting operations have analysed more than 100,000 endpoint devices in 25 organizations".56 The D/BaXdigital backbone experiment has begun at Adazi Military Base, Latvia, in 2024. This experiment, which NATO conducted together with the Ministry of Defence, the National Armed Forces and mobile operator LMT, demonstrates the importance of industry and high technology in strengthening NATO and Baltic defence capabilities. The 5G Military Test Environment was established by the National Armed Forces at Adazi Military Base in 2022 in cooperation with LMT and provides the opportunity to develop and test various sensors, defence systems and platforms, including unmanned solutions, making a significant contri¬ bution to the technological development of the Latvian and Allied armed forces.57 The importance of public-private partnership and the understanding of business responsi¬ bility should also be stressed. A positive example is the close cooperation of national tele¬ communications operators of the Baltic countries with national CERTs, as well as responsi¬ ble intelligence services and ministries. For example, in September 2024, Latvian mobile operator LMT blocked more than 167 million threats from 6.3 million malicious domains. Compared to the same period last year, the number of attacks increased more than 36 times.58 Collectively, the three Baltic States are assessed very well in terms of cyber-preparedness. All three are ranked by the Global Cybersecurity Index in the top 20 out of 193 countries. Estonia places third, after only the United States and the United Kingdom. Lithuania is ranked 6th, whereas Latvia is further down, ranking fifteenth. Lithuania and Estonia rank very high in the National Cyber Security Index, among the top ten, whereas Latvia is slightly behind, placing 25th.59 55 CERT.LV: 2023. gads Latvijas kibertelp , January 2024, available at: https:/ /cert.lv/lv/2024/03/2023gads-latvijas-kibertelpa (last accessed 10.02.2025) 56 CERT.LV: 2023. gads Latvijas kibertelp , January 2024, available at: https://cert.lv/lv/2024/03/2023gads-latvijas-kibertelpa (last accessed 10.02.2025) 57 SARGS. IV: Aizsardz bas ministrija, NBS un LMT kop ar NATO pl no unik lu digit I s savienojam bas eksperimentu, 05 September 2024, available at: https://www.sargs.lv/lv/nozares-politika/2024-0905/aizsardzibas-ministrija-nbs-un-lmt-kopa-ar-nato-plano-unikalu-digitalas (last accessed 10.02.2025) 58 LMT: Kiberapdraud jumu I menis pieaug - uzbrukts vair k nek pusei LMT t kl eso o ier u, 21 October 2024, available at: https:/ /Imt. Imt.lv/jaunumi/kiberapdraudejumu-limenis-pieaug (last accessed 10.02.2025) 59 Latvian Institute of International Affairs : Commonalities, Risks and Lessons for Small Democracies: Hybrid Threats in Baltics and Taiwan, 2022, p. 59, available online: https://www.liia.lv/en/publications/hybrid16 ī ī ē ā A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe In general, despite the significant increase in cyber-attacks, public ICT resources and Cl operators in the Baltic States proved to be very resilient to DDoS attacks thanks to the cooperation of local CERTs, ISPs, and state intelligence agencies. To more effectively coun¬ ter cyber threats, both private and public sector resources and expertise should be com¬ bined. The structure and procedures of cyber defence units should combine best practices from the public, private, and military sectors, decision-making should be results-oriented and procedures automated. In addition to Baltic cooperation and bilateral partnerships with national CERTs, cyber se¬ curity issues have been raised at the EU and NATO levels. On October 4, 2024, European Union and NATO officials held their first structured dialogue on cyber issues. Building on previous talks by senior EU and NATO officials on cyber security and cyber defence, the di¬ alogue aimed to strengthen EU-NATO cooperation on cyber security and cyber defence and to create new opportunities for improved cooperation in the future. The dialogue ex¬ plored ways to further improve the harmonization of relevant cyber defence systems and tools to respond to malicious cyber activities. This is the seventh structured dialogue estab¬ lished between the EU and NATO as part of the implementation of the three EU-NATO Joint Declarations of Cooperation of 2016, 2018 and 2021. The EU and NATO have other struc¬ tured dialogues on military mobility, resilience, new and disruptive technologies, climate and defence, space and defence industry.* 60 Attacks on critical infrastructure in Ukraine Analysis of Kinetic Attacks on Energy Infrastructure For a decade Cl in Ukraine has been under cyber and military (kinetic) attacks from Russia aimed at inflicting direct physical damage. In particular, Russia's full-scale war since 2022 against Ukraine has caused economic disruption, affecting the provisions of vital services and inflicting significant damage to its Cl. Ukraine's experience in resisting aggression and protecting its Cl as well as efforts to restore provision of services and reduce its vulnerabil¬ ities can provide valuable lessons. Therefore, this section aims to discuss the disruptions caused by Russia's attacks - both kinetic and cyber - and the methods used by Ukrainian authorities to protect and restore the functioning of Cl. The focus is on energy infrastructure due to its importance for the society and functioning of state as well as regular targeting by Russia of its objects. The kinetic attacks on the energy critical infrastructure in Ukraine have started in 2022 and continued through 2025 and 2024 affecting the energy and water supply and sometimes resulting in power outages across the country. The scale of the destruction is enormous, especially in the eastern and southern regions. According to the Energy Ministry, the total loss of Ukraine's power capacities due to these attacks exceeds 9 GW. As a result of the extensive damages to business consumers, decrease in number of households, and threats-in-baltics-and-taiwan-commonalities-risks-and-lessons-for-small-democracies-954?get_file=l (last access 10.02.2025) 60 European Comission: Eiropas Savien ba un NATO r ko pirmo Struktur to dialogu par kiberjaut jumiem, 04 October 2024, available at: https://digital-strategy.ec.europa.eu/lv/news/european-union-and-natohold-first-structured-dialogue-cyber (last accessed 10.02.2025) 17 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe disruptions due to ongoing attacks, electricity demand in Ukraine declined by 50-35% com¬ pared to 2021.61 Additionally, Ukraine's power generation capacity, including hydroelectric, thermal, and the Zaporizhzhya Nuclear Power Plant (NPP - the largest in Europe), has been impacted by occupation and attacks. Ukraine now has only three operational nuclear power plants: Khmelnytskyi, Rivne, and South Ukraine NPPs. Notably, despite the ongoing war, Ukraine has begun transitioning to Westinghouse fuel. For the first time, it was utilized at the nuclear power plant in Rivne NPP. The prospect of producing this fuel in Ukraine would help reduce dependence on Russia.62 The current nuclear production capacity stands at 7.8 GW, nearly half of the prewar ca¬ pacity of 13.5 GW. The thermal power stations have also suffered extensive damage, with attacks resulting in the loss of 80% of thermal generation capacity. All Ukrainian hydro¬ power facilities have been damaged or attacked, and the Kakhovka Hydroelectric Power Plant was completely destroyed by Russian forces on June 6, 2025. Two hydropower plants, including the largest, the Dnipro HPP (DniproGes), have suspended operations. In addition to the power system, Russia started attacking Ukraine's underground gas stor¬ age facilities. Those with the highest capacities were attacked multiple times. According to KSS assessments 15% of Ukrainian Solar Power Plants (SPP) capacities are under occupation, with 8% of the total installed solar capacity destroyed or impaired. 65 As to Wind Power Plants (WPP), the 2025 installed capacity totalled 1.8 GW, with roughly 80% situated in occupied territories, with 1% of the total installed wind capacity (at least 10 wind turbines) is damaged or destroyed. Adding 1,5% of biogas stations, 4% of hydroelectric small power plants, totally 20% of the overall installed RES capacity being affected. According to World Bank estimates (Recovery and Reconstruction Needs Assessment) re¬ leased on 15 February 2024 and covering nearly two-year period from Russia's invasion of Ukraine on February 24, 2022, to December 51, 2025, has estimated the direct damage in Ukraine to almost $152 billion (including housing, transport, commerce and industry, energy, and agriculture). 64 61 It is important to note that the access to the energy data is significantly constrained due to limited access to information in accordance with the martial law currently in force in Ukraine. According to the resolution of the National Energy and Utilities Regulatory Commission (NEURC) No. 549 dated March 26, 2022, concerning information protection, it is stated that, under the conditions of a state of war, certain information included that related to critical infrastructure objects may be classified as restricted access information. This limitation leads to incomplete operational data, posing challenges in obtaining comprehensive information about sys¬ tem performance and generating accurate statistics. 62 Westinghouse VVER-440 fuel loaded into reactor, 11 September 2023, World Nuclear News, available at: https://world-nuclear-news.org/Articles/Westinghouse-VVER-440-fuel-loaded-into-reactor (last accessed 13.02.25) 63 Igor Piddubnyi, Dmytro Goriunov, Assessment of damages and losses to Ukraine's energy sector due to Rus¬ sia's full scale invasion, May 2024, p!6, available at: https://kse.ua/about-the-school/news/damages-andlosses-to-ukraine-s-energy-sector-due-to-russia-s-full-scale-invasion-exceeded-56-billion-kse-institute-estimate-as-of-may-2024 1 34 Updated Ukraine Recovery and Reconstruction Needs Assessment Released, Press release, February 15, 2024, World bank Group, available at: https://www.worldbank.org/en/news/press-release/2024/02/15/updated-ukraine-recovery-and-reconstruction-needs-assessment-released (last ac¬ cessed 11.11.24) 18 п A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe The winter 2024-2025 turned out be challenging for Ukraine, as electricity supply was risk¬ ing rolling blackouts (outages) and the unscheduled interruptions, heat supply system dam¬ ages following extensive Russian attacks. The anticipated deficit in the energy system dur¬ ing the cold months could reach 6 GW, according to a report from the International Energy Agency (IEA) dated 19 September 2024. 65 On November 28, 2024, a series of 11 coordinated attacks on the Ukrainian energy system targeted primarily the power delivery infrastructure of nuclear power plants, resulting in a 10-40% reduction in the capacity of eight power units. The temporary loss of up to 5 GW of power necessitated the reintroduction of hourly outage schedules, initially affecting three to four consumer lines, and later impacting one or two lines. Additionally, long-term emergency repairs to damaged facilities were required, par¬ ticularly in the Odessa and Kherson regions. In December 2024, two coordinated attacks on Ukraine's energy system took place, with 95 missiles and 200 UAVs. On December 15, airand sea-launched cruise missiles primarily targeted high-voltage substations essential for the operation of interstate intersections. Then, on December 25, the Russian forces once again struck power units and engine rooms of thermal and hydroelectric power plants, focusing mainly on Ukraine West of the Dnipro river. The number of weapons used reaching 1,500 missiles and nearly 1,000 attack UAVs since the beginning of war. The damage from the Russian strikes could have been far worse had it not been for protec¬ tive measures66 implemented at fuel and energy facilities, along with the presence of sec¬ ond-level protection systems for electricity transmission and distribution. 67 Over the course of the war, the tactics of kinetic attacks have evolved. Since 2022 until now, the Russian Federation has been destroying numerous power generation, transmission, and distribution facilities. At the beginning of the invasion, it started targeting distribution lines and transformator substations. In April 2024 it launched precision missiles at power plants in areas less defended than Kyiv. Some of them were not fully restored by winter. The consequences of the recent at¬ tacks are much stronger than in the winter of 2022-2025, as they are aimed at cutting off power to large cities and industrial areas. Another significant difference from the winter of 2022-2025 is the increased use of costly ballistic missiles. For example, in a recent attack, Russia targeted a power plant with several missiles valued at $100 million. Ukraine has only a limited number of Patriot systems capable of intercepting them. 65 Ukraine's Energy Security and Coming Winter, An energy action plan for Ukraine and its partners, EAI, Sep¬ tember 2024, available at: https:/ /www. iea.org/reports/ukraines-energy-security-and-the-coming-winter (last accessed 11.11.24) 66 Situation in the Energy Sector and Preparations for the Heating season: President Held a Meeting of the Staff, available at https://www.president.gov.ua/en/news/situaciya-v-energetici-ta-pidgotovka-do-opalyuvalnogo-sezonu-91681 (last accessed 07.02.25) 67 These measures are being implemented under Cabinet of Minister's Resolution No 1482 dated 27 December 2022, available at: https://zakon.rada.gov.ua/laws/show/1482-2022- #Text (last accessed 07.02.25) 19 р A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe In the winter of 2024-25, Russia used missiles with cluster warheads in attacks on the en¬ ergy sector, causing significantly greater damage and prolonging recovery efforts due to the need for demining. As the scale and complexity of attacks increased, more advanced weaponry was deployed against Ukraine's energy infrastructure. Ukraine entered the winter of 2025-2024 with a just-sufficient capacity to meet energy demand. However, the situation has deteriorated due to new waves of large-scale Russian strikes, which have further weakened Ukraine's energy infrastructure. The delayed delivery of military aid in late 2025 and early 2024, resulting in a shortfall in Ukraine's air defence capabilities, has significantly increased the vulnerability of its energy infrastructure to air strikes. Cyber security as a critical element of Cl Protection in Ukraine Cyber security is a crucial component in countering Russia's aggression. Investments are essential to enhance Ukraine's capacity to respond to and recover from Russian cyber¬ attacks, particularly those targeting the Cl operators. Cyber-attacks have tripled since the beginning of the invasion (for instance, the major cyber-attacks on energy facilities by Rus¬ sian Sandworm group68 or outage of Kyivstar network69). This highlights the need for robust cyber protection for all facilities connected to the internet. On December 19, 2024, Ukraine experienced its largest cyber-attack on state registries in recent history. The attack, carried out by the Russian actors, temporarily disrupted the op¬ eration of unified and state registries under the jurisdiction of the Ministry of Justice of Ukraine. Overall, the number of cyber-attacks on Ukraine increased by 69.8% in 2024, reaching 4,515 incidents, compared to 2,541 cyber incidents recorded in 2025.70 This information was reported by the State Service for Special Communications and Information Protection. Attackers frequently target local authorities, government and government agencies, the security and defence sector, the energy sector, commercial organizations, and telecom¬ munications providers. The most common types of incidents involve malware distribution, phishing, malicious connections, and account or system compromises. The hackers' goals include stealing sensitive information and destroying data and information systems. Cur¬ rently, there is a steady trend towards an increase in cyber-attacks, primarily against Ukraine's Cl. A significant step in addressing these threats was the adoption of the Action plan71 for implementing Ukraine's Cybersecurity Strategy72. 68 Daryna Antoniuk, Russian hackers target 20 energy facilities in Ukraine amid missile strikes, The Record, available at: https://therecord.media/russian-hackers-target-energy-facilities-ukraine (last accessed 05.02.25) 69 Cyber-attack', BBC, available at: https://www.bbc.com/news/world-europe-67691222 (last accessed 05.02.25) 70 CERT-UA recorded 4,315 cyber incidents in 2024, available at: https://cip.gov.ua/ua/news/cert-ua-minulogo-roku-opracyuvala-4315-kiberincidentiv (last accessed 05.02.25) 71 President's Order of December 19, 2023 No. 1163-r "On approval of the action plan for 2023-2024 for the implementation of the Cybersecurity Strategy of Ukraine", available at: https://zakon.rada.gov.ua/laws/show/1163-2023- #Text (last accessed 05.02.25) 72 Decree of the President of Ukraine dated August 26, 2021 No. 447 "On approval of Cybersecurity Strategy of Ukraine", available at: https://zakon.rada.gov.Ua/laws/show/447/2021#nl2 (last accessed 05.02.25) 20 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Lessons Learned from Incidents Targeting Critical Infrastructure Ukraine needs to expand its distributed power generation, which is less vulnerable to air attacks due to its network of smaller-capacity facilities, such as gas-fired power genera¬ tors, renewable energy facilities, and power storage plants. Authorities have introduced regulations to streamline the process of connecting gas turbines. However, the biggest challenge to accelerating this effort is the debt in the electricity market75, which dampens investment interest, especially given the uncertainties of war. Repairing damaged facilities remains crucial. Some of the damaged thermal power plants may be repairable by 2024-2025 and 2025-2026 winter, though this will require signifi¬ cant equipment, some of which can be manufactured in Ukraine, with the remainder sourced from other countries supporting Ukraine. Some countries have already committed to supplying Ukraine with equipment from their decommissioned power plants. All these efforts require substantial funding, which energy companies currently lack after three years of enduring Russia's energy-related attacks. The government aims to make distributed generation more accessible by facilitating af¬ fordable financing options for energy equipment purchases and streamlining the processes for building, commissioning, and connecting new generation facilities to the grid. Distrib¬ uted generation will secure district heating systems which are the primary source of heating in urban areas, where thermal power plants (TPPs), combined heat and power plants, nu¬ clear power stations, and boiler plants provide heat for entire neighbourhoods. Natural gas meets a significant portion of heating needs, serving both district heating systems and in¬ dividual residential heating: about 80% of Ukrainian households depend on a centralized gas supply, and more than half use centralized hot water systems heated by gas, coal, or, in some cases, biomass. In rural and suburban areas, individual gas, electric, and solid fuel heaters are commonly used by the other half of households. The damage to underground gas storage facilities from Russian attacks also presents a risk to getting through the next winter, as about half of winter demand is covered by gas from storage facilities. It was assumed that Ukraine would probably have to rely more on gas imports from Europe during the winter. This presents yet another problem because in recent years, European countries have relied on storing gas in Ukraine. Despite Russian attacks, all customer nominations for gas storage services and capacity reservations were fully met. However, by late November, commercial exports of gas stored by non-residents in the "customs warehouse" regime had nearly ceased. Anticipating the end of Russian gas transit to the EU via Ukraine on 51 December 2024, active withdrawals from storage facilities led to a decline in reserves from 0.5 to 0.1 billion cubic meters. As of January 1, 2025, following the expiration of the gas transit contract, the transportation of Russian gas through Ukraine has ceased entirely* 74. Ukraine's gas transportation system continues to operate without Russian gas transit, having pre-emptively prepared to function 75 The debt on the balancing electricity market of Ukraine reached a record level of UAH 34.5 billion for 2024, which poses a serious threat to the development of the country's energy sector. In 2024, debts to producers of electricity from renewable energy sources (RES) almost doubled and reached, according to some esti¬ mates, up to UAH 38 billion. 74 Energy Ministry of Ukraine: The Russian gas transportation has stopped, available at: https://mev.gov.ua/novyna/tranzyt-rosiyskoho-hazu-zupyneno (last accessed 05.02.25) 21 • • • A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe in zero transit mode while ensuring a stable gas supply for domestic consumers. Ukraine has duly informed its international partners of this development. Notably, European Com¬ mission has proposed to phasing out Russian gas by 2027, aligning with the objectives of the REPowerEU initiative - an approach that mirrors Ukraine's current actions.75 The extensive missile and drone attacks on Ukraine's energy infrastructure have se¬ verely threatened the country's energy security, disrupting access to essential ser¬ vices such as electricity, heating, and water supply. In alignment with its EU acces¬ sion goals and commitment to a green transition— including OECD-compliant cor¬ porate governance standards— Ukraine is receiving support from international partners to ensure a sustainable economic and social recovery of its critical energy infrastructure. In cooperation with these partners, the Government of Ukraine has taken steps to secure its critical energy infrastructure. The Energy Community's "Ukraine Energy Support Fund" aims to protect this infrastructure from further attacks, including by bolstering Ukraine's air defence capabilities. Ukraine's national Cl protection system includes management bodies, resources, and per¬ sonnel from central and local executive authorities (including military-civil administrations, if established), local self-governance bodies, and Cl operators. These entities are respon¬ sible for developing and implementing national policy on Cl protection. A key component of this system is collaboration with other countries and international organizations to ex¬ change expertise and coordinate efforts in this area. The government is reinforcing security measures at facilities vital to societal resilience. A comprehensive set of actions is underway, including monitoring and rapid responses to po¬ tential threats such as terrorist attacks, cyber-attacks, and natural disasters. To sum up, the following factors should be considered when assessing the future protection of Ukraine's energy infrastructure: The ability of defence forces and energy market participants to provide robust ac¬ tive and passive protection of highly vulnerable facilities, particularly infrastructure critical to nuclear power generation. The availability of transmission and distribution system operators with a reserve of the most vulnerable equipment, sufficient stocks of consumables, and an ade¬ quate number of professional repair teams to swiftly restore networks and systems following attacks or natural disasters. The overall condition of the energy infrastructure, including the extent of wear and tear and the number of repairs already undertaken.76 75 REPowerEU, European Commission, available at: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en (last accessed 05.02.25) 70 Gennadiy Riabtsev, Volodymyr Omelchenko, Overview of the Energy Market Operation in December 2024, available at: https:/ / razumkov.org.ua/images/2025/01/21/2025-PAKT-ENERGY-2. pdf (last accessed 07.01.25) 22 • • • A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe sectors, and a lack of coordination between public and private entities which is important for increasing resilience of Cl. Another concern is linked to the growing presence of authoritarian states in Montenegro through investments and other types of interdependencies. China has been expanding its economic footprint in Montenegro through debt financing infrastructure. One of the most controversial projects is the highway project financed by China's Exim Bank loan, which has left Montenegro with a $1 billion debt to China. This financial dependence has raised con¬ cerns about potential economic coercion and strategic vulnerabilities. Critics argue that reliance on Chinese technology and investment in Cl sectors, such as telecommunications and energy, could compromise Montenegro's sovereignty. 95 The risks associated with for¬ eign control over strategic infrastructure, which the European Parliament's 2021 study high¬ lighted, emphasizing the need for stringent investment screening mechanisms to safeguard national security interests.96 In that regard, particularly important sectors are telecommunication, energy and finance97: Telecommunications: Potential usage of Chinese technology, such as Huawei's 5G infrastructure, could raise security concerns about data privacy and foreign surveil¬ lance. Energy: Russian and Chinese investments in energy infrastructure could led to fears of over-dependence on foreign-controlled resources. Finance: Foreign capital in Montenegrin banks poses risks of money laundering and undue political influence. Potential foreign direct investments (FDI) into Montenegro's Cl sectors have sparked de¬ bates about national security risks.98 While investment is crucial for economic development, concerns persist about foreign control over Cl and the potential for espionage or cyber threats. In response, Montenegro has tightened its investment screening mechanisms and increased cooperation with NATO and the EU to secure its infrastructure from potential geopolitical risks. However, balancing economic development with national security re¬ mains a challenge. Legislative framework and institutions involved in the critical infrastructure policies Montenegro has established a legal framework to regulate the protection and resilience of its Cl. A cornerstone of this framework is the Law on Determination and Protection of Crit¬ ical Infrastructure, adopted in December 2019 and coming into effect in January 2020. This Law was primarily driven by the need to align with EU standards, influenced by Council 95 Center for European Policy Analysis: Chinese Influence in Montenegro', 2022, August , available at: https://cepa.org/comprehensive-reports/chinese-influence-in-montenegro/ (last accessed 25.01.2025) 96 European Parliament: Foreign Direct Investment Screening in the EU and its Impact on Critical Infrastructure Protection, July, 2021, available at: https://www.europarl.europa.eu/RegData/etudes/BRIE/2024/762844/EPRS_BRI(2024)762844_EN.pdf (last accessed 21.01.2025) 97 European External Action Service: Assessment of Cybersecurity Risks in Montenegro: Challenges and Rec¬ ommendations'. EU Publications, October, 2025, available at: https://www.eeas.europa.eu/sites/default/files/documents/2024/Montenegro 7o20Report7o202024.pdf (last accessed 25.01.2025) 98 European Parliament. (2021). 'Montenegro's NATO accession and Russian influence in the Balkans', 18, Janu¬ ary. https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/747096/EPRS_BRI7o2820257o29747096_EN.pdf (last accessed 21.01.2025) 29 • • • • • A InvigoratEU | Policy Report ^ylnvigoratEU “Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Directive 2008/114/EC on the identification and designation of European Critical Infra¬ structure (ECI), and the EU Cybersecurity Strategy and the NIS Directive (2016/1148), which emphasize the resilience of critical information infrastructure (CH). This law outlines the procedures for identifying Cl across various sectors, including energy, transport, water sup¬ ply, health, finance, electronic communications, ICT, environmental protection, and the functioning of state bodies. However, the Law doesn't cover recent developments in the EU and the new Law is expected in 2025." Montenegro's Cybersecurity Strategy for 2022-2026 was adopted in December 2021. This strategy aims to enhance national cyber security and resilience by focusing on risk man¬ agement, threat prevention, and incident response. It is an inter-ministerial document that outlines a five-year plan to improve the country's capacity to address challenges and threats in cyberspace. This legislation mandates that relevant ministries propose Cl within their sectors, with the government responsible for official designation. Cl operators are required to develop Se¬ curity Plans and appoint Coordinators to oversee protection measures. Institutions that play pivotal roles in formulating and implementing policies related to Cl protection are: Ministry of Interior: Oversees the Police Directorate and is responsible for public safety, including aspects related to Cl protection. Ministry of Defence: Manages the military aspects of Cl protection, particularly con¬ cerning defence-related infrastructure. National Security Agency (ANB): Handles counterintelligence. Public attention has particularly focused on the ICT sector, especially after the 2022. In response, Montenegrin authorities have engaged in discussions to understand the multifac¬ eted nature of these threats and to develop comprehensive strategies to counter them. This includes enhancing cyber defenses, improving information sharing among institutions, and collaborating with international partners to address the challenges posed by hybrid attacks. In response to the increasing threat of hybrid attacks, the Montenegrin government has undertaken several initiatives to strengthen Cl protection: Legislative Measures: Establishment of the Government Computer Incident Re¬ sponse Team (CIRT): Following the 2022 cyberattacks, the government established a CIRT to monitor and respond to cyber threats targeting state institutions. The CIRT operates 24/7, utilizing advanced tools to detect and mitigate potential attacks. International Collaboration: Recognizing the transnational nature of cyber threats, Montenegro has engaged in partnerships with the FBI and cybersecurity experts from France and the United Kingdom, to aid incident response and bolster cyber defences. In the aftermath of the 2022 cyberattacks, the government proposed a new Law on Infor¬ mation Security, to address emerging cyber threats and align with EU directives. The law introduces stricter measures for both public and private sectors, encompassing entities from critical sectors such as energy, transport, healthcare, finance, and digital services. It 99 Based on the interview with the official from the Department for Critical infrastructure, Ministry of Interior, February 10, 2025, Podgorica. 50 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe mandates the implementation of comprehensive technical and organizational measures to protect network and information systems, including cyber risk management and data en¬ cryption. The law was adopted at November 2024 and proposes the establishment of a Cybersecurity Agency and a Computer Incident Response Team within the Ministry of Public Administration. In the meantime, the Law on Prevention of Money Laundering and Financing of Terrorism was adopted in December 2025. This law aims to align Montenegro's legal framework with relevant EU directives and comply with the recommendations of the Financial Action Task Force. It underscores the importance of safeguarding financial infrastructure against illicit activities.100 Nevertheless, experts from the European External Action Service have raised concerns about potential overlaps in responsibilities between the proposed Cybersecurity Agency and the government's CIRT, which could lead to inefficiencies and challenges in implemen¬ tation, and highlighted the need for a clearer delineation of responsibilities among institu¬ tions involved in Cl protection. 101 They have also raised questions about the readiness of Montenegro's public and private sectors to meet the stringent requirements outlined in the Law on Information Security, given existing resource constraints. Strengthening public-pri¬ vate partnerships, regulatory clarity, and financial support for infrastructure resilience will be key to enhancing Montenegro's Cl protection in the future. Lessons and concluding remarks Montenegro's critical infrastructure protection strategy is driven by the need to comply with EU regulations, address emerging cyber threats, and strengthen national security. These efforts focus on legal reforms, cyber security, physical security, and improved coordination between public and private actors. First, strengthening the legal and regulatory framework has been a key priority. The Law on Determination and Protection of Critical Infrastructure (2019) establishes a comprehensive framework for identifying, designating, and protecting critical infrastructure sectors, align¬ ing with EU standards. To further enhance security, Montenegro has harmonized its legisla¬ tion with EU directives, including the NIS Directive (Network and Information Security Di¬ rective) and Council Directive 2008/114/EC on European Critical Infrastructure. Addition¬ ally, stricter investment screening mechanisms have been implemented to control foreign investments in sensitive sectors such as telecommunications, energy, and finance, aiming to prevent potential security risks. Second, significant cybersecurity measures and efforts to enhance digital resilience have been implemented. A National Cybersecurity Strategy was created to strengthen the pro¬ tection of critical infrastructure, particularly in response to the cyber-attacks of 2022. Alongside this, Montenegro developed a National Computer Emergency Response Team (CERT) responsible for monitoring, detecting, and responding to cyber threats. Cl operators 100 European External Action Service: Assessment of Cybersecurity Risks in Montenegro: Challenges and Rec¬ ommendations'. Ell Publications, October, 2025, available at: https://www.eeas.europa.eu/sites/default/files/documents/2024/Montenegro 7o20Report7o202024.pdf (last accessed 25.01.2025) 101 European External Action Service: Assessment of Cybersecurity Risks in Montenegro: Challenges and Rec¬ ommendations'. Ell Publications, October, 2025, available at: https://www.eeas.europa.eu/sites/default/files/documents/2024/Montenegro 7o20Report7o202024.pdf (last accessed 25.01.2025) 51 . A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe are now subject to increased cyber security obligations, including the requirement to report cyber incidents, conduct regular security audits, and implement stronger encryption and data protection standards. Additionally, Montenegro has fostered international coopera¬ tion, receiving support from NATO, the EU, the FBI, and cyber security experts from France and the UK to bolster its digital infrastructure and prevent future cyber threats. Montenegro actively collaborates with NATO's Cooperative Cyber Defence Centre of Ex¬ cellence (CCDCOE) and EU cyber security bodies, focusing on knowledge-sharing and training to enhance its cybersecurity capabilities. Additionally, the country is working closely with its neighbouring countries in the Western Balkans to counter hybrid threats and strengthen energy security, reflecting a strong commitment to regional coordination. Mon¬ tenegro also participates in joint cyber defence exercises with its international allies to improve its response capabilities against sophisticated cyber threats102. Third, physical security and risk mitigation measures have been implemented, including sec¬ tor-specific security protocols for energy facilities, transport hubs, and financial institutions. Cl operators are also required to develop emergency preparedness plans, conducting risk assessments and establishing crisis response mechanisms to ensure continuity during natu¬ ral disasters, cyber incidents, or sabotage. Additionally, backup systems and redundancy measures have been put in place to ensure that alternative infrastructure is available in the event of power failures, cyber disruptions, or terrorist attacks. Fourth, public-private collaboration and institutional coordination have been prioritized through the creation of a National Critical Infrastructure Coordination Body, which facili¬ tates information-sharing and joint security planning between government agencies and private sector critical infrastructure operators. Public-private partnerships are encouraged to promote investment in modern infrastructure while ensuring compliance with national security requirements. Additionally, private Cl operators, including telecommunications companies, banks, and energy providers, are mandated to adhere to government-imposed security measures and participate in national cyber drills to enhance resilience and prepar¬ edness Ukraine Legislative framework and institutions involved in the critical infrastructure policies Building on the chapter 5.2. which presented the main threats related to kinetic and cyber attacks of Russia on Ukrainian energy Cl, this chapter analyses legislative framework regu¬ lating Cl-related policies, interdependencies between Ukraine's energy system and that of the EU, assessing connectivity and the implications of these connections in both the short and long term. It explores opportunities for rebuilding the energy system by leveraging pro¬ gressive trends and attracting investments. The national legislation on protection and resilience of Cl outlines the state's core principles and objectives in this area. Emerging threats to Cl, such as natural and man-made disas¬ ters, cyberattacks, and terrorist acts, require robust preventive and mitigation measures. The State Service for Critical Infrastructure Protection oversees policy in this field, 102 Based on the interview with the official from the Department for Critical infrastructure, Ministry of Interior, February 10 2025. 52 п A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe facilitating coordination and cooperation among various protection entities. It was formed under the recent Cabinet of Minister's Resolution.105 Under Ukrainian law, entities within the national critical infrastructure protection system include government agencies, local authorities, and essential enterprises, institutions, and organizations that contribute to national security. Private companies providing critical ser¬ vices to the country's operation are also recognized as part of this system. The following types of actors are institutionalised within the Cl policy system. Critical Infra¬ structure Operator - a legal entity and/or individual that manages a critical infrastructure facility by ownership, lease, or other lawful basis and is responsible for its ongoing opera¬ tion. Sectoral Body for Critical Infrastructure Protection (Sectoral Body) - a government body that, according to legislation, develops and implements state policy on critical infra¬ structure protection within a specific sector. Authorized Body for Critical Infrastructure Pro¬ tection in Ukraine (Authorized CIP Body) - responsible for formulating and implementing state policy on critical infrastructure protection, overseeing the national critical infrastruc¬ ture protection system, and coordinating the activities of ministries and critical infrastruc¬ ture operators on resilience and protection matters. Additionally, this authorized body maintains and administers the Cl Register, a key tool for coordinating Ukraine's Cl protection efforts. The register enables stakeholders in the na¬ tional protection system to synchronize their activities, exchange information, and build a centralized database of threats and vulnerabilities. It also facilitates the certification, se¬ curity, and assessment of critical infrastructure facilities, ensuring a comprehensive over¬ view of protection status across sectors. The protection of Cl involves implementing a range of measures aimed at preventing, de¬ tecting, and mitigating the effects of emergencies that may disrupt the operation of these facilities. These measures are carried out both in peacetime and under the current condi¬ tions of martial law. According to No. 1109 Resolution of the Cabinet of Ministers of Ukraine dated October 9, 2020, “Some issues of critical infrastructure facilities" four levels of criticality have been established for critical infrastructure facilities in Ukraine.* 104 The first category includes all facilities of national significance, such as nuclear power plants. The fourth category en¬ compasses general regional facilities (such as kindergartens and schools), classified as such by local authorities. The specific measures for protecting Cl and its legal status in the event of unpredictable crisis situations, extreme conditions, and military actions are outlined in Ukraine's laws "On the Legal Regime of Martial Law," "On the Legal Regime of the State of Emergency," "On the Functioning of the Unified State System of Civil Protection in a Special Period," and "On the Defence of Ukraine." 105 Resolution No. 787 of the Cabinet of Ministers of Ukraine dated July 12, 2022, titled "On the Establishment of the State Service for Critical Infrastructure Protection and Ensuring the National Resilience System of Ukraine, available at: https://zakon.rada.gov.ua/laws/show/787-20 22- #Text (last accessed 11.12.24) 104 Resolution of the Cabinet of Ministers of Ukraine No 1109 dated 9 October 2020 "On certain Critical infra¬ structure issues, available at: https:/ /zakononline.com.ua/documents/show/490116 742722 (last ac¬ cessed 07.02.25) 35 • • • • • • • • • • • • • A InvigoratEU | Policy Report ^ylnvigoratEU “Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe For 2024, the Ukrainian government has worked out a Cl protection policy aimed at safe¬ guarding essential infrastructure from potential threats and hostile attacks. In particular, the deployment of air defence systems within the country is aligned with the criticality levels of facilities, ensuring protection against enemy attacks and technological disasters. On 19 November, 2024, President of Ukraine presented Ukraine's Internal Resilience Plan (10 Points including Energy). 105 This plan includes a confidential annex detailing measures for the active and passive protection of energy facilities, which hold managers personally accountable for their implementation. The document encompasses: Development of regional energy stability passports. Demand management and encouragement of rational fuel and energy consump¬ tion. Implementation of measures to enhance energy efficiency. Preparation of regulatory and legal frameworks for establishing a Ukrainian energy hub. Support for the development of nuclear energy. Increased production and resumption of natural gas and oil processing. Further integration of Ukrainian and European gas storage and transportation in¬ frastructure. It is worth noting that the Law of Ukraine No. 4059-IX (November 19, 2024), concerning the State Budget of Ukraine for 2025. 106 This law allocates the funds for protection of the crit¬ ical energy infrastructure as follows: UAH 115 billion drawn under state guarantees for the restoration of critical infra¬ structure, including energy infrastructure. UAH 42.5 billion for subsidizing housing and communal service payments. UAH 18.0 billion for the "5-7-9" lending program. UAH 12.2 billion to bridge the gap between actual and economically justified tariffs for heating energy. UAH 2.4 billion for restructuring the coal industry. UAH 1.8 billion for financing projects under the State Fund for Decarbonization and Energy Efficient Transformation Overview of the legislation in Ukraine Cl Protection is presented in Appendix 1. Ukraine's energy integration with the EU In line with EU membership aspirations Ukraine strives to become an electricity supplier for Europe, focusing on its green energy potential. Despite the war, the energy system of Ukraine has preserved its integrity and continued to work with the European continental grid ENTSO-E. The electricity grids of Ukraine (and Moldova) were successfully synchronized with the European power system operated by ENTSO-E. Yet, Ukraine needs to implement EU legislation to enable market integration and competition. The emergency synchronisation of Ukraine and Moldova to the European continental grid serves shortand long-term interests on both sides. In the short term, this integration has 105 Volodymyr Zelenskyy Presented Ukraine's Internal Resilience Plan, available at: https://www. presi¬ dent. gov. ua/en/news/volodimir-zelenskij-predstaviv-plan-vnutrishnoyi-stijkosti-u-94505 (last accessed 7.02.25) 106 Law No. 4059-IX (November 19, 2024), concerning the State Budget of Ukraine for 2025, available at: https://itd.rada.gov.ua/billinfo/Bills/Card/44888 (last accessed 07.02.25) 34 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe enabled Ukraine to stabilize its electricity supply during periods of intensive Russian bom¬ bardment and maintenance of its nuclear power plants. Furthermore, it has facilitated sub¬ stantial electricity exports to European neighbours, generating critical revenue for Ukraine. According to data from ExPro Electricity, Ukraine has quadrupled its total electricity imports in 2024 compared to 2023. From June to August alone, over 2.1 million MWh were imported, which is three times more than the entire previous year. In 2023, the maximum import ca¬ pacity from European countries in Ukraine from increased 1200 MW to 1700 MW. The transborder trade capacities have been reviewed recently. Prime Minister Denys Shmyhal stated107 that Kyiv is in the final stages of negotiations with ENTSO-E, the European network of transmission system operators, to raise import limits from the current 1.7 GW to 2.2 GW. From December 1, the maximum capacity for importing electricity from EU countries will be increased from the current 1.7 to 2.1 GW. According to the Energy Ministry, Ukraine will have a guaranteed 250 MW transborder capacity in the emergency aid mode.108 Within 10 months in 2022, Ukraine exported electricity worth USD 542.5 million. However, the continuous attack and consequential damages to the power sector also resulted in the Ukrainian government's decision to stop the electricity export to the EU/ENTSO-E starting from 11 October 2022. This was a forced step, as all generation capacities were redirected to meet Ukraine's internal needs. In the future these transactions must be carefully handled to provide enough electricity to Ukrainian consumers. The architecture of trading electricity with EU has to be organised according to the EU rules under the transparent competitive auctions in which companies will purchase the access to interstate power lines. The next step after the technical synchronization of Ukraine's energy system with the Euro¬ pean grid is the integration of our energy markets. Ukraine and the EU are making produc¬ tive progress in this direction, and in 2022, during Ukraine's chairmanship of the Energy Community, the relevant Regulation and Roadmap were approved109. These measures set the stage for the full integration of Ukrainian and European energy markets. For the EU market, this integration supports more economical energy exchange, strengthens electricity supply security, and diversifies supply routes. For Ukraine, connection to the Eu¬ ropean transmission system guarantees access to imports and emergency supplies. Various stakeholders across ENTSO-E are interested in enhancing electricity exchange and advancing transmission system development plans. Ukrenergo, the Ukrainian Transmission System Operator (TSO), has been negotiating with Poland's TSO, PSE, on coordinated ac¬ tions along the shared transmission profile. A recent modification reconfigured an existing interconnector between Poland and Ukraine, reducing it from 750 kV to 400 kV. In 2018, SEPS (the Slovakian TSO) and Ukrenergo conducted a bilateral study to assess future system requirements for reinforcing the Slovakia-Ukraine transmission profile as the 107 Ukraine is negotiating with Europe on expanding electricity imports to 2.2 GW - Denys Shmyhal, available at: https://www.ukrinform.ua/rubric-economy/5902823-ukraina-vede-peregovori-z-evropou-sodo-rozsirennaimportu-elektroenergii-do-22-gvt-smigal.html (last accessed 12.11.24) 108 ENTSO-E has increased the capacity to import electricity to Ukraine -up to 2.1 GW, available at: https://expro.com.ua/en/tidings/entso-e-has-increased-the-capacity-to-import-electricity-to-ukraine-upto-21-gw (last accessed 12.11.24) 109 Ukraine's Power Network Integration with EU ENTSO-E, Energy Ministry of Ukraine, available at: https://mev.gov.ua/en/reforma/ukraines-power-network-integration-eu-entso-e (last accessed 12.11.24) 55 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe current interconnector approaches the end of its service life. Further studies will determine whether to upgrade the line to a single-circuit configuration with higher load capacity or to a double-circuit configuration. MAVIR, the Hungarian TSO, has announced an upgrade of an existing 220 kV line, currently outside of synchronization. Transelectrica, Romania's TSO, has informally agreed with Ukrenergo to include the 400 kV (formerly 750 kV) OHL Pivdennoukrainska NPP (Ukraine) - Isaccea (Romania) line in the upcoming editions of the TYNDP and National Development Plans. This line is already recognized as a Project of Mutual Interest (PMI) by the Energy Community. In recent years, Ukraine has embarked on a transition to a clean energy system, aligning with its net-zero commitments. National programs and strategies reflect key decarboniza¬ tion trends, including the electrification of end-use sectors, production of clean hydrogen and its derivatives, carbon capture and storage (CCS, BECCS), and the transformation of gas infrastructure to support a hydrogen and biomethane economy. One of Ukraine's primary objectives in decarbonizing its energy system is to reduce green¬ house gas (GHG) emissions from the energy sector by decreasing energy demand, electri¬ fying end uses and expanding renewable and low-carbon energy sources. In November 2021, at the UN Conference of the Parties (COP), Ukraine presented its Second Nationally Determined Contribution (NDC-2), committing to a 65% reduction in GHG emissions by 2050 compared to 1990 levels. Despite the challenges of war, over 70% of Ukraine's elec¬ tricity is generated from non-carbon sources, including nuclear, hydro, and renewable en¬ ergy. Beginning in 2026, Ukrainian exports to the EU will be subject to the Carbon Border Adjust¬ ment Mechanism (CBAM) under the Fit for 55 package.110 Ukraine has already begun mon¬ itoring its emissions, with plans to introduce an Emissions Trading System as outlined in Di¬ rective 87/2005/EC. In 2019, trade with the EU accounted for 40.1% of Ukraine's total trade in goods and services. Ukraine estimates that emissions from Russia's invasion amount to approximately 55 million tonnes of CO2 from the conflict itself and an additional 25 million tonnes of CO2 from fires caused by the invasion. All new projects in Ukraine will need to address the significant environmental contamination and associated costs. The renewable energy sector has been sustaining damage from shelling, missiles, and drone attacks. RES development objective need to increase the RES share in electricity, heating and cooling, and in the transport sector. The National Energy Strategy until 2055 targets 25% of RES in electricity production while the National economic strategy until 2050 sets an even more ambitious goal - 25% of elec¬ tricity production from RES. The draft National Action Plan for the Development of Renew¬ able Energy until 2050 (to implement the Directive 2018/2001/EC) envisages a 5-fold in¬ crease of the RES share in gross final energy consumption: from 9% in 2020 up to 27% in 2050. 1,0 European Council, Fit for 55, available at: https://www.consilium.europa.eu/en/policies/fit-for-55/ (last accessed 12.11.24) 56 • • • • • A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Actions to boost Renewable Energy generation include: Remove Regulatory Barriers: The regulatory obstacles to renewable energy devel¬ opment need to be dismantled. Review Payment Terms for Green Electricity: Payment terms for renewable energy have changed multiple times during the war and require reassessment. Address Curtailments and Forecasting Challenges: The TSO continues to apply cur¬ tailments to RES generating companies, and production forecasting remains prob¬ lematic. Support for RES Producers: The feed-in tariff should gradually be replaced by other market-based instruments, including net billing, guarantees of origin (in line with the Renewable Energy Directive II (EU) 2018/2001), and corporate power purchase agreements (Corporate PPAs). The necessary legislation is already in place. Better storage opportunities. Legislative changes111 were introduced in Ukraine on electric energy storage, as well as licensing conditions approved to carry out eco¬ nomic activities for energy storage. According to the Energy Community Secretariat Report,112 despite ongoing military action, "Ukraine has managed to keep its electricity market model largely intact and has provided assurances that emergency measures taken in the gas sector will be swiftly lifted once the war ends." However, several issues must be addressed before launching new projects. The electricity market model requires improvements, as various market segments currently face distortions, including Public Service Obligations (PSOs), price caps on day-ahead and intraday markets, artificial regulation, and unresolved debts between major market partic¬ ipants. Enhancing the market model is essential for attracting new projects and facilitating post¬ war reconstruction, aligning Ukraine's energy sector with the European market to support greater transparency in price formation. Agreements with international partners indicate significant potential for Ukraine's involve¬ ment in the emerging hydrogen economy. 115 However, implementation of them will largely depend upon conclusion of the military combat and subsequent reconstruction efforts, in which European support will be essential. Ukraine has been identified as a key partner of the European Clean Hydrogen Alliance for participation in the production and supply (export) of hydrogen, considering natural re¬ sources, interconnected infrastructure and the level of technological development. 1,1 Law of Ukraine "On Amendments to Certain Laws of Ukraine on the Development of Energy Storage Facili¬ ties" No. 5456-d of 17 September 2021, available at: http://wl.cl.rada.gov.ua/pls/zweb2/webproc4_l?pf 5511=72789 (last accessed 09.12.24) 1,2 Secretariat's Implementation Reports, available at http://www.energy-community.org/implementation/report/reports.html (last accessed 09.12.24) 1,5 In 2021, an MoU was signed on hydrogen collaboration between Germany and Ukraine on green hydrogen production. In April 2025 Ukraine signed an MoU with the EU resulting in a strategic partnership on "biomethane, hydrogen and other synthetic gases". In early 2025 Hydrogen Europe published a recovery plan that included the export of green ammonia, and the use of 2 - 4 GW of nuclear power for hydrogen production, with Germany being the preferred off-taker. 37 A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Research is underway in Ukraine about the possibilities of low-carbon hydrogen production, competitive price, and supply routes. This potential role is associated with facilitating the infrastructure development, both by building new assets (electrolysers, renewables, pipelines) and by repurposing existing as¬ sets, namely the gas network. Ukraine can perform the functions of hydrogen hub provided there is the decision on Ukraine regarding the green energy production perspectives. Perspective of being part of European Hydrogen Backbone (EHB) initiative."4 As the demand for hydrogen as a vector of energy grows, there will be a need to expand a regulated hydrogen network (pipelines, storage). As stated in the EU Hydrogen Strategy, hydrogen" offers a solution to decarbonise industrial processes and economic sectors where reducing carbon emissions is both urgent and hard to achieve". 1,5 Overview of the potential inland and cross-border hydrogen projects are presented in Appendix 2. Lessonsand concluding remarks Ukraine's strategic location and abundant renewable energy resources, including solar, wind, and biomass, position it favourably for a transition towards clean energy. By investing in renewable energy infrastructure and implementing policies to incentivize clean energy adoption, Ukraine can not only reduce its carbon footprint but also reduce its vulnerability to external shocks, enhance energy security and resilience of Cl, and stimulate economic growth. Collaboration with international partners, including the EU, can also play a crucial role in supporting Ukraine's decarbonisation efforts. Through strategic partnerships and coopera¬ tion agreements, Ukraine can leverage external expertise and resources to accelerate its transition to a low-carbon economy. Cl rehabilitation is essential to the energy transition in Ukraine to achieve both its ambitious climate goals and to provide the basis for competitive economy in post war period and integration into the European energy market. Despite the full-scale invasion in February 2022 and the enormous pressure, Ukraine has so far managed to maintain the operation of its energy Cl and capability to provide essential services, however, sometimes with dis¬ ruptions. Nowadays the major challenges remain the political and war risks insurance for the poten¬ tial private investors in Ukraine. With the war risks being very high, the insurance companies are faced with the issue of offering very expensive coverage for the private investors. Many EU member states see the lack of war insurance as a barrier to private sector involvement in Ukraine's reconstruction. 1,4 Analyzing future demand, supply, and transport of hydrogen, European Hydrogen Backbone, June 2024, available at: https://ehb.eu/files/downloads/EHB-Analysing-the-future-demand-supply-and-transport-ofhydrogen-June-2021-v3.pdf (last accessed 11.12.24) 1,5 European Commission, Brussels, Hydrogen, 2025, available at: https://energy.ec.europa.eu/topics/eusenergy-system/hydrogen_en (last accessed 11.12.24) 58 A InvigoratEU | Policy Report j^lnvigoratEU “Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe particular, fast recovery from incidents or attacks, and diversification of energy and other infrastructure connections to reduce vulnerabilities from being weaponized by authoritarian powers. Again, examples of Baltic States redirecting their energy and transport connec¬ tions from Russia to the Northern and Central European countries as well as Ukraine's en¬ ergy integration could be seen as good practice examples how to reduce vulnerability of Cl to external risks. Another important observation is that connectivity patterns and ongoing processes of inte¬ gration require intense cooperation between countries to manage risks related to crossborder activities, including those that affect functioning of Cl. Therefore cooperation be¬ tween sub-regional groups like Baltic States, Baltic Sea Region states or Western Balkan countries, also within the EU and NATO formats is important. It includes timely cross-border sharing of intelligence, pooled expertise and other resources, joint exercises contributing to better preparedness for potential incidents and for restoring the vital functions to society and state. While these are well-known factors which strengthen the resilience of Cl they need to be regularly practiced. Joint exercises in preventing cyber risks, such as conducting stress tests and regular cyber training for responsible structures, testing technologies and equipment under near-critical conditions with EU and NATO partners are important. Besides, more sys¬ temic formats of cooperation between the EU and its candidate countries could be devel¬ oped to facilitate such practices, for example, by jointly reacting to particular external shocks and drawing lessons for improving the resilience of Cl entities. Bibliography/List of References Aho, A., Alonso Vil lota, M., Giannopoulos, G., Jungwirth, R., Lebrun, M., Savolainen, J., Smith, H., & Willkomm, E. (2025). Hybrid Threats: A Comprehensive Resilience Ecosystem. Euro¬ pean Centre of Excellence for Countering Hybrid Threats & European Commission Joint Research Centre. 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RAI EE: Cyber Security in Estonia 2023, January 2024, available at% https://www.ria.ee/sites/default/files/documents/2023-02/Cyber-Security-in-Estonia2023.pdf (last accessed 10.02.2025) 51 ū š ī ā ā ā ā ā ī п A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Ram nas Vilpi auskas: Gradually and then suddenly: the effects of Russia's attacks on the evolution of cybersecurity policy in Lithuania, In Policy Studies, 45 (5-4), p. 467-488. REPowerEU, European Commission, available at: https://commission.europa.eu/strategyand-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secureand-sustainable-energy-europe_en, (last accessed 05.02.25) Resolution of the National Energy and Utilities Regulatory Commission (NEURC) No. 549 dated March 26, 2022 RIA. EE, Cyber Security in Estonia 2024, January 2025, available at: https://www.ria.ee/sites/default/files/documents/2024-02/Cyber-security-in-Estonia2024.pdf (last accessed 10.02.2025) RIA. EE: Cyber Security in Estonia 2025, p.10, January 2024, available at: https://www.ria.ee/sites/default/files/documents/2025-02/Cyber-Security-in-Estonia2025.pdf (last accessed 10.02.2025) Roberto Setola et al. (eds.) Managing the Complexity of Critical Infrastructures. A Model¬ ling and Simulation Approach, 2016. Roberto Setola/Eric Luiijf/Marianthi Theocharidou: Critical Infrastructures, Protection and Resilience, 2016. Roberto Setola/Eric Luiijf/Marianthi Theocharidou: Critical Infrastructures, Protection and Resilience, in: Roberto Setola et al. (eds.) Managing the Complexity of Critical Infrastruc¬ tures. A Modelling and Simulation Approach. SpringerOpen, 2016, SARGS. LV: Aizsardzbas ministrija, NBS un LMT kop ar NATO pl no unik lu digit I s savienojam bas eksperimentu, 05 September 2024, available at: https://www.sargs.lv/lv/nozares-politika/2024-09-05/aizsardzibas-ministrija-nbs-unlmt-kopa-ar-nato-plano-unikalu-digitalas (last accessed 10.02.2025) Tim Prior: Measuring Critical Infrastructure Resilience: Possible Indicators, Risk and Resili¬ ence Report 9, Centre for Security Studies (CSS), ETH Zurich, 2014, p. 5. Ukraine's Cabinet of Minister's Resolution No 1482 dated T1 December 2022, available at: https://zakon.rada.gov.ua/laws/show/1482-2022- #Text (last accessed 07.02.25) Ukraine's Energy Security and Coming Winter, An energy action plan for Ukraine and its partners, EAI, September 2024, available at: https://www.iea.org/reports/ukraines-energy-security-and-the-coming-winter (last accessed 11.11.24 Ulrich Beck: Risk Society: Towards a New Modernity, published in German in 1986 and trans¬ lated into English in 1992 by Sage Publications. For more recent studies see Jon Coaffee: Future Proof. How to Build Resilience in an Uncertain World, Yale University Press, 2019; Markus K. Brunnermeier: The Resilient Society, Endeavor Literary Press, 2021. 52 € A InvigoratEU | Policy Report j^lnvigoratEU “Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Westinghouse VVER-440 fuel loaded into reactor, 11 September 2025, World Nuclear News, available at: https:/ /world-nuclear-news.org/Articles/Westinghouse-VVER-440-fuelloaded-into-reactor (last accessed 15.02.25) World bank Group, Updated Ukraine Recovery and Reconstruction Needs Assessment Re¬ leased, Press release, February 15, 2024, available at: https://www.worldbank.org/en/news/press-release/2024/02/15/updated-ukraine-recovery-and-reconstruction-needs-assessment-released (last accessed 11.11.24) World Bank: Montenegro Country Climate and Development Report, December 2024, avail¬ able at: https://www.worldbank.org/en/country/montenegro/publication/montenegrocountry-climate-and-development-report (last accessed 22.01.2025) Yle News (2024) 'Baltic gas pipeline ruptured by Chinese ship back in service after 40m repair job', 22 April. https://yle.fi/a/74-20084948. Yle News (2024) 'Estlink cable disruption: Finnish Border Guard detains tanker linked to Russia's 'dark fleet”, 26 December. https://yle.f i/a/74-20155516. Interviews: Interview with a former senior official of the Government of Lithuania (2020-2024), Feb¬ ruary 8, 2025, Vilnius; Interview with the Ministry of Interior's officials, October 17, 2024, via Zoom; Interview with the official from the Department for Critical infrastructure, Ministry of Interior, February 10, 2025, Podgorica; Exploratory interview with Cyber Security Expert Giorgi lashvili, December 20, 2024, Tbilisi; Exploratory interview with Security Policy Expert Shalva Khutsishvili, January 50, 2025, Tbi¬ lisi. Appendix 1 Overview of the legislation in Ukraine Cl Protection Law of Ukraine No. 1882-IX "On Critical Infrastructure". (2021, November). Retrieved from https://zakon.rada.gov.ua/laws/show/188220#Text. Resolution of the Cabinet of Ministers of Ukraine dated November 12, 2022 No. 787 "On the Establishment of the State Service for Critical Infrastructure Protection and Ensuring the National Resilience System of Ukraine." Resolution of the Cabinet of Ministers of Ukraine No. 1109 dated October 9, 2020, "Some issues of critical infrastructure facilities" Decree of the President of Ukraine No. 722/2019 "On Sustainable Development Goals of Ukraine for the period until 2050". (2019, September). 55 п A InvigoratEU | Policy Report j^lnvigoratEU “Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe Law of Ukraine No. 2163-VI 1 1 “On the Fundamental Principles of Ensuring Cyber Security of Ukraine". (2017, October). Law of Ukraine No. 2469-VI 1 1 "On National Security of Ukraine". (2018, June). Decree of the President of Ukraine No. n0014525-16 "On Improving Measures to Ensure the Protection of Critical Infrastructure Objects". (2016, December). Retrieved from https://zakon.rada.gov.Ua/laws/show/n0014525-16#Text. The decision of the National Security and Defence Council of Ukraine No. n0001525-17 "On Urgent Measures to Neutralize Threats to the Energy Security of Ukraine and Strengthening the Protection of Critical Infrastructure". (2017, January). Retrieved from https://zakon.rada. gov.ua/laws/show/n0001525-17#Text. Resolution of the Cabinet of Ministers of Ukraine No. 1109-2020- "On Some Issues of Objects of Critical Infrastructure". (2020, October). Retrieved from https://zakon.rada.gov.ua/laws/show/1109-2020-%D07oBF#Text. Resolution of the Cabinet of Ministers of Ukraine No. 563 "On the Approval of the Proce¬ dure for the Formation of the List of Information and Telecommunication Systems of Objects of Critical Infrastructure of the State". (2016, August). Retrieved from https://zakon.rada.gov.ua/ laws/show/563-2016-7oD07oBF#Text. https://zakon.rada.gov.ua/laws/show/n0001525-17#Text. Law of Ukraine No. 2163-VIII "About the Main Principles of Ensuring Cyber Security of Ukraine". (2017, October). Retrieved from https:// zakon.rada.gov.ua/laws/show/216319#Text. Decree of the President of Ukraine No. 392/2020 "On the Decision of the National Security and Defense Council of Ukraine "On the National Security Strategy of Ukraine". (2020, September). Retrieved from https://zakon.rada.gov.Ua/laws/show/392/2020#Text. Law of Ukraine No. 1882-IX "On Critical Infrastructure". (2021, November). Retrieved from https://zakon.rada.gov.ua/laws/show/188220#Text Appendix 2 Hydrogen projects in Ukraine Green hydrogen can help transform energy sector, industry, and transport to achieve sus¬ tainability and climate neutrality. Ukraine has high potential for RES development, water resources, as well as human and educational potential. Ukraine, along with relevant transit countries, possesses well-established infrastructure, in¬ cluding pipelines and seaports, for exporting hydrogen and Power-to-X products to West¬ ern Europe. However, further investigations are needed to repurpose this infrastructure ef¬ fectively. The European Union (EU) is considering Ukraine as a potential hydrogen supplier, aiming to meet European energy demand, and supporting Ukraine's recovery from the Russian inva¬ sion. 54 • € • • € A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe The European Commission has introduced a new initiative called the 'Ukraine Facility'156, to offer war risk insurance for Ukraine. This innovative program is intended to address both immediate recovery requirements and the longerterm reconstruction and modernization needs of Ukraine. The Facility is de¬ signed to be adaptable, considering the unique challenges of supporting a nation at war, while also prioritizing the transparency, predictability, and ac¬ countability of funds. The Facility, if adopted by the European Parliament and Council of the EU, will mobilise up to 50 billion over four years in the form of both grants and loans. This proposal acknowledges the potential for a protracted conflict and the ongoing necessity for macro-financial assis¬ tance. War Insurance Pilot Scheme - Ukraine Recovery and Reconstruction Guar¬ antee: The European Commission has shown an interest in backing an in¬ ventive pilot program by the EBRD, contemplating the utilization of its guar¬ antee funds. This program's objective is to address market deficiencies, mak¬ ing it easier for both Ukrainian and international companies to obtain war insurance. The guarantees will serve the dual purpose of safeguarding forth¬ coming private investments and providing insurance coverage for interna¬ tional shipping and trade against the risks associated with armed conflict. Multi-agency Donor Coordination Platform for Ukraine157 oversees the co¬ ordination of funding to meet Ukraine's immediate financial requirements and address its future needs for economic recovery and reconstruction, uti¬ lizing a range of funding sources and established financial instruments. Launched on January 26, 2023, with its inaugural Steering Committee meet¬ ing, this initiative unites senior officials from Ukraine, the EU, G7 nations, and partners from international financial institutions. Initiatives on investment insurance from Ukraine's partners Within the new framework for war risk insurance initiated during the London confer¬ ence, partners announced their support for the Support for Ukraine's Reconstruction and Economy (SURE) Trust Fund of the World Bank's Multilateral Investment Guaran¬ tee Agency (MIGA), with a total guarantee of 40.85 million. The European Bank for Reconstruction and Development (EBRD) also expressed its intention to develop a pilot scheme for insurance against war risks. Moreover, according to lawmakers, certain countries such as the United Kingdom, Japan, Germany, France, Canada, Australia, Israel, and others have already established special funds for insuring in¬ vestments in Ukraine. 156 Brussels, 20.6.2023 COM(2023) 338 final 2023/0200 (COD), Proposal for a REGULATION OF THE EURO¬ PEAN PARLIAMENT AND OF THE COUNCIL on establishing the Ukraine Facility, available at: https://neighbourhood-enlargement.ec.europa.eu/system/files/2023-06/COM_2023_338_l_EN_ACT_partl_v6.pdf (last ac¬ cessed 11.12.24) 157 Donor Coordination Platform for Ukraine, https:/ /coordinationplatformukraine.com/ 61 • £ £ • • • € • A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe United Kingdom. The United Kingdom Export Finance (UKEF), the National Export Credit Agency of the United Kingdom, has recently committed to pro¬ vide up to 200 million for political and war risk insurance for British investors considering investment opportunities in Ukraine. In June 21 Great Britain158 pledged 20 million ($25 million) to boost access to a World Bank scheme which helps derisk business operations in Ukraine, a move designed to encourage more investment in the country. Germany. The German Ministry for Economic Affairs offers insurance cov¬ erage for its investors through the Investment Guarantee Scheme. This allows German companies to invest in Ukraine without the need to delay their in¬ vestments until after the war. With this tool, the federal government safe¬ guards German investors from political risks to prevent or compensate for potential losses. Under the terms of the scheme, the German government has appointed the international consulting company "Pricewaterhouse¬ Coopers" (PwC) to administer the Investment Guarantee Scheme. This scheme covers the following risks: war, expropriation (nationalization), spe¬ cific acts of terrorism, as well as the risk of contract breach. Poland. The draft law on investment insurance for Polish companies in Ukraine includes the reinsurance of risks for companies registered in Ukraine with Polish capital. The Polish Export Credit Agency, KUKE, will implement this insurance mechanism for a long-term period (two years or more). They also propose introducing reinsurance for cargoes transported to Ukraine. Similar insurance funds are also being created in other countries. In partic¬ ular, the Export Credit Agency of France has a limit on credit risk insurance in Ukraine in the amount of 1 billion. Similar projects were launched in Ja¬ pan. Denmark created special fund that would insure the investments of Danish residents in Ukraine. This fund159 launched by the Danish government, amounts of $57 million. The projects of the "Nibulon" company in the Mykolaiv and Kherson regions were insured from it. Also, Danish Government facili¬ tated Carlsberg's investment in its Ukrainian branch. On June 19, the com¬ pany opened a production line at the Kyiv plant, the investment amounted to UAH 1.5 billion. Ukraine has agreed with a few players to launch an investment insurance mech¬ anism during hostilities. 158 UK pledges up to 20 million pounds to help derisk investment in Ukraine https://www.reuters.com/business/ uk-pledges-up-20-mln-pounds-help-derisk-investment-ukraine-2025-06-21/ 159 The Danish Government established the Ukraine Fund which has already accumulated 7 billion DKK for 2025, available at: https://denmark.mfa.gov.ua/en/news/danish-government-established-the-ukraine-fund (last accessed 07.11.24) 62 • • • • A InvigoratEU | Policy Report j^lnvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe The Multilateral Investment Guarantee Agency (MIGA), a division of the World Bank Group, has committed to a pilot project valued at $30 million for Ukraine. Initially, one investment project will be selected to refine the pro¬ cesses of offering guarantees to foreign investors. MIGA already possesses instruments like Political risk Insurance, which includes War risk Insurance as part of its offerings. On September 2023 MIGA issued guarantees to Ukrain¬ ian Industrial Property Holding Limited (UIPH) to cover its equity and share¬ holder loan investments of up to $ 9.6 million into Limited Liability Company "Industrial Park MIO160 in Lviv, Ukraine. The term of the MIGA guarantee is up to 10 years against the risk of War and civil disturbance. As political leaders and G7 finance ministers converged on London for the Ukraine Recovery Conference, Marsh McLennan has proposed the creation of a vast "war risk pool" to insure the reconstruction work required to rebuild the country's infrastructure and shattered economy. Ukraine has activated a data platform161, supported by Marsh McLennan, that would allow insurers, investors and governments to analyse war risks in the country. The data plat¬ form aggregates comprehensive maps detailing war-related incidents in Ukraine. These incidents are defined as individual events linked to Russian hostilities, encompassing activities such as missile attacks, drone attacks, and shelling, all occurring since the Russian invasion in February 2022. The European Bank for Reconstruction and Development (EBRD)162 has en¬ tered into a statement of intent in collaboration with the European Commis¬ sion, Norway, Switzerland, the TaiwanBusiness - EBRD Technical Cooperation Fund, and Ukraine. The aim is to revitalize the private insurance market in Ukraine through joint efforts with essential market and public-sector partic¬ ipants to establish a guarantee facility. The key challenge lies in offering suitable insurance options for private-sector investors. They will also explore leveraging donor support to re-engage Ukraine domestic insurance and re¬ insurance industries and their global counterparts, as well as creating a plat¬ form for dialogue among key public and private insurance market stakehold¬ ers, to identify further areas where cooperation may be possible. The Government of Ukraine is also engaged in cooperation with the Ameri¬ can Development Finance Corporation (DFC), 166 which provides insurance for war-related risks. The DFC is evaluating several projects within Ukraine. It has endorsed a Memorandum of Understanding, outlining the framework 100 M10 Industrial Park Ukraine, available at: https://www.miga.org/project/mlO-industrial-park-ukraine-0 (last accessed 07.11.24) 101 Ukraine launches Marsh McLennan-supported war risk data platform, available at: https://www.reinsurancene.ws/ukraine-launches-marsh-mclennan-supported-war-risk-data-platform/(last accessed 07.11.24) 102 International move to unlock war insurance for Ukraine investments, available at: https://www.ebrd.com/news/2023/international-move-to-unlock-war-insurance-for-ukraine-investments.html (last accessed 07.11.24) 103 Joint statement on support for Ukraine Investment platform, available at: https://www.dfc.gov/media/press-releases/joint-statement-support-ukraine-investment-platform (last accessed 07.11.24) 63 j^lnvigoratEU InvigoratEU | Policy Report for collaboration, particularly in the private sector, in Ukraine. This agree¬ ment, officially signed during the Ukraine Recovery Conference in London, follows through on the initial commitment made by the EBRD and the G7's Development Finance Institutions (DFIs) to establish the Ukraine Investment Platform, a commitment initially announced during the G7 meeting in Tokyo. With new participants now coming on board, the total number of participat¬ ing entities has reached 19. 64 ^^InvigoratEU 'Invigorating Enlargement and Neighbourhood Policy for a Resilient Europe InvigoratEU | Policy Report About InvigoratEU InvigoratEU is a Horizon Europe-funded project, coordinated by the EU-Chair at the Uni¬ versity of Duisburg-Essen (UDE) together with the Institut für Europäische Politik (IEP) in Berlin. The project, with a duration of 5 years from January 2024 until December 2026, examines how the EU can structure its future relations with its Eastern neighbours and the countries of the Western Balkans. The consortium has received around three million euros for this endeavour. How can the EU invigorate its enlargement and neighbourhood policy to enhance Europe's resilience? Our first goal is to investigate how to re¬ form the EU's enlargement strategy in a new geopolitical phase, HOW TO RE¬ SPOND to other actors' geopolitical am¬ bitions in the Eastern Neighbourhood and Western Balkans, and HOW TO RE¬ BUILD the EU's foreign policy arsenal in view of a new era of military threats (tri¬ ple "R" approach) combining the mod¬ ernisation and geopolitical logics of EU enlargement, leading to new data - e.g. a public opinion survey in Ukraine, a set of scenarios, an external influence index (Russia, China, Turkey), and a social policy compli¬ ance and cohesion scoreboard. Our second goal is to elaborate an evidence-based, forward-looking vision for the EU's political agenda and institutional frameworks for co-designing a multidimensional toolbox (i.e. two tailor-made toolkits), together with InvigoratEU s Expert Hub, Civil Society (CS) Network, Youth Labs, Workshops for Young Professionals and Policy Debates in a gaming set up, which will result in context-sensitive and actionable policy recommendations for Euro¬ pean and national political stakeholders and (young) European citizens in particular. Our third goal is to deploy a CDE (communication, dissemination and exploitation) strategy aiming at recommendations from Day 1 to maximize our scientific, policy and societal im¬ pact in invigorating the EU's enlargement and neighbourhood policies to enhance Europe's resilience. Ultimately, InvigoratEU is a deliberately large consortium respecting the diversity of Europe and political perspectives; 7 out of 18 are from Georgia, Moldova, Ukraine, and the western Balkans (North Macedonia, Montenegro, Serbia), complemented by our Civil Society Network of 9 representatives from all Western Balkan countries, Georgia, Moldova and Ukraine. InvigoratEU is funded by the European Union. Disclaimer: Views and opinions expressed are however those of the author(s) only and do not nec¬ essarily reflect those of the European Union or the European Research Executive Agency. Neither the European Union nor the granting authority can be held responsible for them. Funded by the European Union 65