Due to the full-scale invasion by the Russian Federation, Ukraine has become the most heavily mined country in the world, as stated by the Ministry of Economy. Official data suggests that nearly one-third of the country's territory is potentially contaminated.

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Some analysts predict that it would take over 750 years to clear the mines using conventional methods and available resources.

The contamination has rendered parts of the country's most valuable agricultural lands unusable, requiring significant resources for cleanup. The cost of this cleanup and potential sources of funding were explored by LIGA.net.

Who and how is demining carried out in Ukraine?

As noted by First Deputy Prime Minister of Economics Yulia Svyrydenko, over 170,000 square kilometers of Ukraine's territory are potentially contaminated. More than 6 million citizens are at risk due to unexploded mines and shells. Approximately 800 Ukrainians, with over 250 fatalities, have already become victims of mines. Nature is also affected, with biodiversity, soil, and water suffering from the consequences of explosions.

According to the Ministry of Internal Affairs of Ukraine, international standards indicate that the effort required for one day of combat is approximately equivalent to that of a month dedicated to demining activities.

International statistics indicate that demining one square meter costs between $2.5 and $8.5. The more hazardous objects on the territory, the more expensive the process, not to mention the local terrain and specific features of the area. Clearing mines in fields is one thing, but addressing mines in marshes, rivers, or lakes is a different challenge altogether.

Demining. Photo by Andriy Zaika, LIGA.net
Demining. Photo by Andriy Zaika, LIGA.net

While the Armed Forces of Ukraine, units of the State Emergency Service, the Ministry of Internal Affairs, and the National Guard, as well as the State Transport Safety Service, are engaged in the survey and demining of Ukrainian territory, there is a clear shortage of experts.

Specifically, the standard for qualified manual demining, where a sapper navigates a hazardous area with a mine detector, is a maximum of 20 square meters per working day. This means that the calculation with five sappers demining a hectare of land would take three months of daily work.

According to the State Emergency Service, the country's demining service has 600 certified deminers in total.

However, the priorities are given to thousands of objects of critical infrastructure and public territories, while forests and fields are not considered a top priority.

Private companies can already be hired for demining, although these services are not cheap. According to LIGA.net, UAH 5 million per hectare is just the cost of manual demining. There are options – the cost of mechanized demining is 15 times lower than manual. However, the necessary equipment is still insufficient.

As of mid-summer this year, the Ministry of Defense certified 14 operators for mine action, and 16 more were undergoing accreditation.

And it's crucial to remember that mine action has several directions. The key ones include combat, operational and humanitarian demining. The latter is a crucial stage that marks the beginning of any restoration in areas, communities, or territories where military forces were once present or where combat took place.

REFERENCE  Humanitarian demining, unlike operational and combat demining, involves a comprehensive survey of the entire territory where mines or unexploded ordnance may potentially be present. Both state and private organizations and companies in Ukraine are engaged in this activity.

Out of the 14 organizations licensed by mid-year, only half were specifically conducting humanitarian demining. These organizations comprised 145 groups, totaling approximately 900 deminers.

This process involves technical inspection and actual demining, each requiring a separate certificate.

Farmers and demining

Amidst a shortage of specialists and the prolonged nature of the demining process, representatives of some major agroholdings are establishing their own demining teams. For instance, as reported by LIGA.net, the "Nibulon" holding, led by Andriy Vadatursky, received a certification for Non-Technical Survey (NTS) in late April – a process to identify potentially mined areas.

Currently, the holding is undergoing accreditation for the next step – Technical Survey. However, this process is both time-consuming and costly. Training a single demining specialist costs approximately $4,000 to $5,000. Additionally, there are significant expenses for equipment and protective gear.

Small and medium-sized agricultural producers, often lacking the resources, find themselves demining their own lands or structures using mine detectors.

Against this backdrop, some banks at the end of autumn began promoting a new product – loans for demining fields. This sparked criticism on social media platforms.

"So, the state bank offers Ukrainian farmers... a loan for demining. I am speechless. By the way, with interest. These are the strategies of reconstruction, de-occupation, and reintegration. Do you have more ideas for such businesses? Because I am not ready to voice mine out loud," expressed one social media user.

However, financial experts insist that this type of financing emerged in response to client demands and is not intended for profit from issues.

"For us, this is not a business. We know where to make money – we are currently third in the country in the small and medium business credit portfolio and third in growth rates. This product is specific, niche, but necessary. If a farmer understands that he cannot wait indefinitely for his land to be humanitarian demined and wants to sow without waiting for anyone, then he has this alternative," said Natalia Butkova-Vitvitska, a member of the board of the state-owned Oschadbank, responsible for micro, small and medium enterprises.

She noted that before announcing the product, the financial institution surveyed its clients in regions affected by war and now requiring demining.

"We know our clients; throughout the entire war, we continued working with them on loans. Our strategy has always been aimed at supporting small and medium-sized businesses. We understand their needs very well. That's why we conducted a survey of clients from small and medium-sized agribusinesses to find out if they find such a product interesting and if they would use it. In the Kherson Oblast, 80% expressed readiness, 20% in the Zaporizhzhia Oblast. In other regions, the readiness is around 10%. Even in these regions, there are already real applications for such loans," explained the banker.

Natalia Butkova-Vitvitska. Photo by banki.ua

The government provides funds for interest rate compensation under the '5-7-9' preferential state loan program.

Currently, we combine our product with the government's 'Affordable Loans 5-7-9%' program, which allows us to set the interest rate for such loans at 3%. Without the government's participation, this rate would be around 17%," said Natalia Butkova-Vitvitska.

Loans are granted with confirmed usage purposes and subsequent verification. The recipient cannot use them for salary payments or purchase fuel and lubricants. Payments can only be made to licensed companies for demining.

Currently, Oschadbank is prepared to issue short-term loans for up to three years at 3% per annum, but consultations with the government are ongoing to change the program's plans to make it possible to issue funds for 10 years or more.

"If we calculate the profitability of such a product – compare how much money needs to be spent and when they can pay off – the target audience for our demining credit product is clients with a small land bank, those who have orchards, vineyards, or vegetable growers. This term is three years. For clients engaged in field cultivation and grain production, with large land banks and, accordingly, requiring more significant investments in demining, the payback period can be 10-12 years. However, the current conditions of the 'Affordable Loans 5-7-9%' program do not allow for lending for such a long term. Currently, to be able to issue long-term loans for 10-12 years at such a low rate, changes to this state program are necessary. We are in dialogue with relevant ministries about the possibility of making such changes for this specific purpose," said the board member of Oschadbank.

She added that in their calculations, bankers used data from open sources and focused on the fact that there are three stages of demining. The last and most expensive stage is physical demining, which costs from $30,000. Alternatively, it ranges from $3 to $8 per meter. The cost of the second stage – technical survey – is $150 per hectare.

As for how popular this banking product might become, bankers are not yet ready to provide forecasts.

"We cannot predict the volumes because this is a new product not only for us but also for Ukraine and the world. However, even if we hear different opinions about its feasibility, there should be demand for it," said Natalia Butkova-Vitvitska.

Another state bank, UkrGasBank, also has similar programs. However, according to sources at LIGA.net, the government is considering expanding the 'Affordable Loans 5-7-9%' program to issue long-term loans at 1% or compensating farmers for demining expenses at around 80% of the spent funds – a so-called 80% cashback.