Kathrine Frich
Pressure on the Kremlin is steadily mounting.
Sanctions train Russia’s economy and the war in Ukraine drives up costs.
With military spending soaring and revenues under pressure, Moscow has been searching for ways to sustain its war effort while limiting long-term economic damage.
Now, there are signs the Kremlin may be trying to turn the occupation itself into a source of profit.
Massive investments
According to a Reuters analysis, cited by Digi24, Russia is rapidly investing billions into infrastructure and economic projects across occupied Ukrainian territories.
The scale of these efforts suggests Moscow is no longer treating the occupation as temporary, but as a long-term integration strategy.
Satellite imagery, official documents and transport data reviewed by Reuters show that more than 2,500 kilometers of roads, railways and logistics routes have been built, repaired or upgraded since 2022.
A new ‘russia’
President Vladimir Putin has referred to the occupied regions as “Novorossiya,” or “New Russia,” a term rooted in Russia’s imperial past.
The Kremlin has allocated around $11.8 billion for development between 2024 and 2026, a level of funding far exceeding that given to many regions within Russia itself.
Officials in Moscow insist the territories are now an integral part of the Russian Federation, while Ukraine and its allies view the spending as clear evidence of long-term annexation.
Ports and resources
Efforts are also underway to restart key infrastructure, including the ports of Mariupol and Berdyansk on the Sea of Azov.
Shipping activity has resumed, with cargo such as coal and grain reportedly being exported to countries including Turkey and the United Arab Emirates.
At the same time, natural resources in the occupied regions are being transferred to Russian companies through state-backed auctions, turning local assets into revenue streams for Moscow.
Crimea model
Ukrainian officials say the strategy closely mirrors the approach used after Russia annexed Crimea in 2014, but is now being carried out at a much faster pace.
“They did everything so quickly… Crimea was their testing ground,” said Olha Kurishko, a representative of the Ukrainian presidency.
President Volodymyr Zelensky has dismissed the developments, arguing the regions are becoming heavily militarised rather than improved for civilian life.
Impact on peace
Analysts warn that the scale of these investments could complicate any future peace negotiations.
New infrastructure allows Russia to move troops, equipment and goods more efficiently, while strengthening its hold over the territories.
As economic integration deepens, reversing the situation may become increasingly difficult.
Sources: Reuters, Kyiv Post, Digi24.
