Welcome to the “New Russia”: The Kremlin is seizing occupied Ukraine

Moscow is investing hundreds of millions of dollars in aggressively building transport and trade infrastructure in the Ukrainian territories it has seized. These projects are inexorably incorporating the occupied areas into Russia and undermining demands by Kiev and its allies for the territory to be returned.

Trains on fire, tracks ablaze, black smoke. Footage posted online by Ukrainian fighters document their persistent sabotage and attacks on the vast railway system that Russia is building across occupied Ukrainian territory. But their efforts are nowhere near enough to stem Moscow's wave of rapid industrial expansion.

Attacks on Russian supply chains have had very limited impact, and the tightening of Russian control is stifling resistance, said one Ukrainian fighter, Orest, who for security reasons gave his military codename while operating behind enemy lines in the Donetsk region. “The line is hundreds of kilometers long,” he told Reuters. “Unfortunately, we are not omnipotent.”

According to the Kremlin, these occupied areas represent “Novorossiya” - the New Russia. And it's all buzzing with activity.

While Moscow is waging a devastating war against Ukrainian forces in the west of the country, it is also investing hundreds of millions of dollars in an aggressive, multi-year construction of transport and trade infrastructure in areas it has seized in the east and south, a Reuters investigation has shown.

This investment offensive, which far outstrips development funds allocated to other Russian regions, facilitates the transport of troops and military equipment, as well as grain and mineral resources. The construction projects also serve Moscow’s longer-term goal: to firmly integrate the occupied territories into Russia, including the Donbas region, whose fate is at the center of U.S.-backed talks to end the war.

Reuters reporting provides the first detailed picture of the transformation of Russian-controlled parts of Ukraine under occupation. The analysis is based on the study of thousands of satellite images, official Russian tender documents, public statements, export and freight traffic data, and interviews with more than three dozen Ukrainian officials and former residents of the occupied territories.

When asked about Russian infrastructure construction in occupied territories, Ukrainian President Volodymyr Zelensky cited Crimea as an example, saying that Russian investments there are a "facade" that do not benefit the residents of that Ukrainian peninsula, which Moscow annexed in 2014.

“It doesn’t look like a modern tourist center,” he said in an interview. “Everything is militarized.” Zelensky’s office did not respond to a request for comment on the full findings of the Reuters investigation.

A White House official said that US President Donald Trump is working intensively to end the war and wants to stop the senseless killing.

Kremlin spokesman Dmitry Peskov told Reuters that the four territories were an integral part of the Russian Federation and “subjects of Russia,” adding: “This is written in the country’s constitution.”

In three years of occupying new territories, the Russians have done as much as they achieved in Crimea in ten years, according to our analysis. They did everything much faster, spent enormous resources and raised the level compared to what they did in Crimea. Crimea was a learning curve for them, said Olha Kurishko

Work on the so-called “Novorossiya” railway system is well underway, including a planned 525-kilometer line, construction of which began in 2023, a year after the start of Russia’s invasion of Ukraine. The route is intended to connect the Donetsk and Luhansk regions, which make up the Donbass, as well as the Zaporizhia and Kherson regions.

Meanwhile, the “Novorossiya” highway is cutting through the occupied territories as part of the 1.400-kilometer “Azov Ring” superhighway, which will connect these regions with Russia and the strategically important Crimea.

Occupied Ukrainian ports, which were largely inactive in the early years of the war, have been rebuilt and reopened under the Russian flag on the inland Sea of ​​Azov, which is connected to the Black Sea. Satellite images of the city of Mariupol in Donetsk Oblast from August last year show a new, silver-domed facility about the length of a football field built on the docks during the Russian occupation. Also visible nearby is a large pile of coal-like material, ready for export.

An analysis of satellite imagery by Reuters showed that between 2022 and 2025, more than 2.500 kilometers of railways, highways and roads were built, renovated or upgraded across the four occupied territories, as well as in the nearby Russian regions to which they are connected.

The scale of the investment and the long-term nature of the infrastructure projects indicate that the Kremlin has no intention of returning these territories to Ukraine as part of any future peace agreement, according to Caroline Hird, a national security researcher at the Washington-based Institute for the Study of War.

"The way Russia is investing massively in the industry and economy of the occupied territories of Ukraine, in order to profit from the occupation, is simultaneously financially tying Ukraine to Russia," she said.

That's bad news for Ukraine and its European allies, who insist that Moscow return the occupied territory and firmly reject calls from the United States that Kiev cede control of all of Donbas as part of any deal to end the four-year conflict.

Moscow has also put dozens of valuable resources in the occupied territories up for sale, according to Russian state auction documents. These include mines and agricultural land - including the rights to exploit one of the largest gold deposits in Ukraine, which was purchased by a Russian mining company in April 2025.

The Russian Ministry of Transport and the company "Novorossiya Zheleznytsia", a state-owned enterprise established in 2023 to oversee the construction and maintenance of railways in the occupied territories, did not respond to questions about the progress of infrastructure projects.

Moscow makes no secret of its historical claim to eastern and southeastern Ukraine, nor its ambition to re-incorporate those regions into what it considers its homeland. President Vladimir Putin has ambitious plans for “Novorossiya,” a term from Russia’s imperial past that modern nationalists use to describe those territories.

Russia has allocated about $11,8 billion from the federal budget for the development of four occupied territories in Ukraine from 2024 to 2026 under a program of priority national development projects, a Reuters analysis based on publicly available government data shows. That is almost three times the total amount allocated for about 20 other Russian regions covered by the same program.

Putin outlined his vision for the territories in a speech on September 30, marking the third anniversary of their “reunification” with Russia. The regions, he said, had been devastated by war and neglected for decades, and Russia had built 6.350 kilometers of roads there in the past three years.

"A large-scale program of socio-economic development has been launched, essentially a program of restoration of the historic Russian land of our ancestors," Putin said.

Moscow currently controls about a fifth of Ukraine's territory, including most of four regions: Donetsk, Luhansk, Zaporizhia and Kherson. At the same time, it formally claims the entire territory of all four regions as part of Russia.

Ukraine and its Western allies have condemned the Russian annexation as an illegal seizure of territory.

New road and rail links under construction are already allowing people and goods to and from Ukraine to be diverted past the Crimean Bridge, according to local and Russian authorities. The bridge was previously Russia's only road and rail link to Crimea, crucial for transporting troops, fuel and equipment to Ukraine across the peninsula. However, it has become a bottleneck for Russian military and trade flows, and Ukrainian attacks have caused delays and disruptions.

Vadim Skibicki, deputy head of Ukraine's HUR military intelligence service, which monitors adversary activities, said Russia is focusing on building logistics chains that support war operations.

"For Russians, the most important thing is infrastructure. It's transport infrastructure," he added.

Satellite images reveal new railway

Russia has spent about $425 million since 2023 on building and maintaining a railway network in the occupied territories, according to data published online by “Novorossiya Zheleznytsia” and the Russian railway regulator in August last year.

The key project is a main railway that is to connect southern Russia with Crimea via the occupied territories, according to the official Russian government media outlet. The total planned cost was not specified.

Satellite images taken between July 2023 and November 2025 show the gradual construction of one section of the railway - a 60-kilometer section between the towns of Novoselivka and Kolosky in Donetsk Oblast, north of Mariupol.

A Ukrainian intelligence official who has been monitoring Russian activities said the section showed Russia was building new rail links further from the front line, at a safer distance from potential Ukrainian attacks, to safely deliver ammunition and military vehicles to its troops. Reuters could not confirm whether the line was already operational.

Russia's road construction program is also spending hundreds of millions of dollars, led by the "Novorossiya" highway project, state tender documents show.

According to data from the Russian public procurement website, a total of 20 tenders related to the construction of the highway have been awarded, worth more than $214 million. The projects cover a wide range of works - from engineering surveys to bridge maintenance. The Russian Ministry of Transport announced late last year that an additional $123 million would be invested in the road by 2026.

“Like Crimea, but faster”

Satellite images show work on the construction and rehabilitation of bridges and interchanges, the widening of roads, and even the removal of vegetation along roads.

According to a Reuters analysis, workers have completed most of the roughly 100-kilometer section between Taganrog in southwestern Russia and an area near Mankhush in the occupied Donetsk region. The analysis also shows that Russia is building a major bypass around Mariupol, a city that was almost completely razed to the ground in the early stages of the war.

The “Novorossiya” highway forms part of the so-called Azov Ring in the occupied territories. Russian officials say they plan to complete the highway by 2030, connecting Rostov-on-Don with Mariupol in Donetsk Oblast, as well as cities in Zaporizhia Oblast and Crimea.

Olha Kuryshko, the Ukrainian presidential envoy for Crimea, tasked with monitoring the rights of Ukrainians living there, says Russia's rapid development of economic infrastructure in eastern and southern Ukraine is similar to what Moscow did in annexed Crimea - but now it is happening much faster.

After seizing Crimea in 2014, Russia launched a series of ambitious projects, including the Crimean Bridge - a monumental 19-kilometer-long structure for road and rail traffic - as well as a new highway and two power plants that provided a stable electricity supply to the peninsula after it was cut off from energy from Ukraine.

“The Russians have done as much in three years of occupying new territories as they did in Crimea in ten years, according to our analysis,” Kurishko said. “They did everything much faster, spent enormous resources and raised the level compared to what they did in Crimea,” she added. “Crimea was a learning curve for them.”

The Kremlin is taking over Ukrainian ports

Russia has also moved to take control of Ukrainian ports on the Sea of ​​Azov, a shallow inland sea bordered by Russia and Ukraine, which is connected to the Black Sea via the Kerch Strait. The Sea of ​​Azov has been an important trade route for centuries.

In August, Moscow added Mariupol and Berdyansk on the Sea of ​​Azov to the official list of Russian ports open to international shipping, a move that Kiev condemned. Both ports are being deepened, and the channels leading to them are being widened and deepened to once again accommodate larger ships. The projects are part of a tender for work at the two ports, worth more than $13 million, published on Russia’s state procurement website from 2023.

Two experienced port workers in Mariupol, who spoke on condition of anonymity, told Reuters that the port had been significantly busier in recent months. Ships were coming and going loaded with grain and coal, they said, but added that the volume of activity was still below pre-war levels.

Between July and November last year, 18 cargo ships operated by Russian and foreign companies set sail from the ports of Mariupol and Berdyansk, mostly bound for ports in Turkey, according to an analysis of ship tracking data by LSEG. Reuters was unable to determine exactly what the ships were carrying. Turkish authorities did not respond to a request for comment on the voyages.

According to LSEG data, during 2024, no ships entered or departed from these two ports.

Russia also exploits valuable natural resources from occupied territories.

Russian customs data, provided by a commercial trade information provider, show that between March 2022 and March 2025, at least 508.500 metric tons of coal, coke and anthracite, worth $13,2 million, were exported from the occupied regions. The main buyers of Ukrainian coal during that period were trading companies from Turkey and the United Arab Emirates, according to the data. Coal was also exported to companies in India, Indonesia, Egypt and Algeria.

Indonesia's foreign ministry said the country's trade relations are conducted through transparent mechanisms and that it imports coal from several countries, including Russia, Australia and China. None of the other destination countries responded to requests for comment.

Gold mine in eastern Ukraine

Moscow has further expanded control over natural resources in occupied Ukrainian territories through state auctions.

Dozens of resources and sites - from mines and quarries to agricultural land - are being sold in state-run online auctions, public documents reviewed by Reuters show. Among the resources already sold are rights to exploit sandstone, crushed stone, granite and limestone from four mines in the Luhansk region.

One of the largest sales so far involves the rights to develop the Bobrykivskoye gold mine in Luhansk Oblast. It was bought by Alchevskpromgrup for $9,7 million, which is controlled by Russian mining company Polyanka, according to sales documents. Polyanka mainly develops mines in Russia's Far East.

The Bobrikivskyi mine's reserves are estimated at around 1,64 tonnes of gold, which, at current market prices, would be worth almost $260 million, according to the auction documentation.

Australian mining company Korab Resources previously developed the deposit, but suspended operations in 2014 when the area was seized by Russian-backed separatists, preventing the company from accessing the region under Western sanctions. The project was scrapped, CEO Andrey Karpinski said, according to publicly available Ukrainian business records.

Satellite imagery from September shows vehicle tracks around the site. Asked to compare that footage with that from June 2024, Karpinski said work had already begun. He pointed to what appeared to be an excavator in the main pit, as well as shipping containers placed next to a pile of excavated rock.

Alchevskpromgrup, Polyanka and the Russian Ministry of Natural Resources did not respond to questions about the sale of the Bobrikivskoe mine or whether work has officially begun.

Caroline Hird of the Institute for the Study of War said that occupying such a large territorial area carries high costs, but that the ability to exploit the natural and industrial resources of those areas could be crucial for Russia, especially in conditions of war and international sanctions.

“It could lead to a point where the occupation actually becomes profitable for Russia,” Hird said.