SPECIAL REPORT-Welcome to 'New Russia': How the Kremlin is remaking occupied Ukraine

By Anastasiia Malenko, Filipp Lebedev, Gleb Stolyarov, Ryan McNeill and Mari Saito

March 26 (Reuters) - Blazing trains, burning tracks, black smoke.

Footage posted online by Ukrainian fighters documents their repeated sabotage attacks on a vast railroad system being built by Russia across the occupied territories of Ukraine. But their efforts are not nearly enough to hold back the tide of Moscow's rapid industrial expansion.

The attacks on Russia's supply chains have made scant impact, and tightening Russian control is snuffing out opposition efforts, said one Ukrainian fighter, Orest, using his military call-sign for security reasons as he operates behind enemy lines in the Donetsk region. "The railroad is hundreds of kilometres long," he told Reuters. "We're not all-powerful, unfortunately."

According to the Kremlin, these occupied regions represent "Novorossiya": New Russia. And it's buzzing with activity.

Even as Moscow pursues a devastating war against Ukrainian forces to the west, it's pouring hundreds of millions of dollars into an aggressive, years-long buildout of transport and trade infrastructure in the areas it has captured in the east and south, a Reuters investigation has found.

The spending spree, which dwarfs the development funds allocated to other Russian regions, facilitates the transport of troops and military equipment, as well as grain and mineral resources, the reporting shows. The construction projects also serve a longer-term goal of Moscow: weaving the seized territories into Russia, including the Donbas area whose fate lies at the heart of U.S.-backed talks to end the war.

Reuters reporting provides the first detailed picture of the transformation of Russian-held Ukraine taking place under the occupation. This examination draws on an analysis of thousands of satellite images, official Russian tender documents, public statements, export and freight data, as well as interviews with more than three dozen Ukrainian officials and former residents of the occupied areas.

When asked about Russia's infrastructure buildup in the occupied territories, Ukrainian President Volodymyr Zelenskiy used Crimea as an example, saying Russian investments there are a "facade" that don't benefit residents of the Ukrainian peninsula, which Moscow annexed in 2014. "It doesn't look like some modern resort," he said in an interview. "It's all militarized." Zelenskiy's office didn't respond to a request for comment on the full findings of the Reuters investigation.

A White House official said U.S. President Donald Trump is working very hard to end the war and wants to end the senseless killing.

Kremlin spokesman Dmitry Peskov told Reuters the four territories are an integral part of the Russian Federation and "subjects of Russia", adding: "It is written in the constitution of the country."

Work is well underway on the so-called Novorossiya Railways system, which includes a planned 525 km (326-mile) line started in 2023, the year after Russia's full-scale invasion of Ukraine. The route is to span the regions of Donetsk and Luhansk, which comprise the Donbas, and Zaporizhzhia and Kherson.

The Novorossiya Highway is, meanwhile, carving its way across those seized territories as part of a 1,400 km "Azov Ring" superhighway loop that will hook the regions up with Russia and strategically important Crimea.

Occupied Ukrainian ports that were largely inactive in the first years of the war have been revamped and reopened under Russia's flag on the inland Sea of Azov, which connects to the Black Sea. Satellite images taken last August of the city of Mariupol in Donetsk show a new silver-domed facility about the length of a football pitch has sprung up on the docks during the Russian occupation. Also visible nearby is a mountain of what looks like coal being readied for export.

The satellite analysis, conducted by Reuters, used a machine-learning model to crawl through thousands of optical and radar images to identify major construction. It found that more than 2,500 km of railroads, highways and roads have been newly built, repaired or upgraded between 2022 and 2025 across the four occupied territories and the nearby Russian areas they have been connected up to.

The scale of investment and long-term nature of the infrastructure projects shows the Kremlin has no intention of returning the territories to Ukraine as part of any future peace settlement, according to Karolina Hird, a national security fellow at the Washington-based Institute for the Study of War.

"The way Russia's investing very heavily in industry and the economy in occupied Ukraine, so it can reap profits off of the occupation, also financially entangles Ukraine into Russia," she said.

That's bleak news for Ukraine and its European allies. They have insisted that Moscow return the captured land and have roundly rejected U.S. calls for Kyiv to cede control of the whole of the Donbas as part of any deal to end the four-year-old conflict.

Moscow has also put dozens of prized commodity assets in the occupied areas up for sale, Russian state auction documents show. These include mines and agricultural land – such as the rights to develop one of Ukraine's biggest gold deposits, which were snapped up by a Russian mining company in April 2025.

The Russian transport ministry and Novorossiya Railways, a Russian state enterprise created in 2023 to oversee rail construction and maintenance in the occupied territories, didn't respond to queries about the progress of the infrastructure projects.

Moscow makes no secret of what it views as its historical claim to eastern and southeastern Ukraine or its ambitions to recombine the regions with what it deems the motherland. And President Vladimir Putin has grand plans for "Novorossiya" – a term from Russia's tsarist imperial past that modern nationalists use to describe the territories.

Russia has allocated about $11.8 billion of federal cash to develop the four occupied territories in Ukraine between 2024 and 2026 as part of a program for priority national development projects, according to a Reuters analysis of government data published online. That is almost three times as much as the combined money allocated to about 20 other federal regions targeted for such projects, the data shows.

Putin outlined his vision for the territories in a public address on September 30 to celebrate the third anniversary of their "reunification" with Russia. The regions had suffered from the ravages of war and decades of neglect, the president said, and Russia had laid 6,350 km of roads there over the last three years.

"A large-scale program of socio-economic development has been launched, essentially a program of reviving our ancestral, historical Russian lands," Putin declared.

Moscow currently controls about a fifth of Ukraine, including the bulk of four regions: Donetsk, Luhansk, Zaporizhzhia and Kherson. And it has formally claimed the entirety of all four as part of Russia.

Russia's move to annex the territories has been condemned by Ukraine and its Western allies as an illegal land grab.

The new road and rail connections being built already allow vehicles and trains moving people and goods in and out of Ukraine to circumvent the Crimean Bridge, according to local and Moscow authorities. The bridge had previously been Russia's only road and rail link to Crimea, enabling the transport of troops, fuel and equipment to Ukraine via the peninsula. It has proved a chokepoint for Russian military and trade flows, with repeated Ukrainian strikes causing delays and disruption.

Vadym Skibitskyi, deputy chief of Ukraine's HUR military intelligence agency, which has been monitoring the enemy activity, said the Russian focus was on building out supply chains to support their war effort.

"The most critical consideration for the Russians is infrastructure. It is the transport infrastructure," he added.

SATELLITE IMAGERY REVEALS NEW RAILWAY

Since 2023, Russia has spent about $425 million on the construction and maintenance of the railway network in the occupied territories, according to statements posted online by Novorossiya Railways and the Russian rail watchdog in August last year.

The centrepiece project is the main line to connect southern Russia to Crimea via the occupied territories, according to the official media outlet of the Russian government. It didn't specify the planned full cost.

Satellite imagery taken between July 2023 and November 2025 shows the gradual process of a section of the line being newly laid, a 60-km connection between the towns of Novoselivka and Kolosky in Donetsk region, north of Mariupol.

A Ukrainian intelligence official who monitors Russian activity said this connection is an example of how Russia is building new rail links further from the front line, at a safer distance from possible Ukrainian strikes, to safely deliver ammunition and military vehicles to its troops. Reuters couldn't determine if the line is in operation.

The Russian roads program is also soaking up hundreds of millions of dollars, led by the Novorossiya Highway project, state tender documents show.

A total of 20 tenders related to the building of the highway, worth more than $214 million, have been awarded to contractors, according to Russia's state procurement website. The projects range in scope from engineering surveys to bridge maintenance. The Russian transport ministry said late last year that an extra $123 million would be spent on the road in 2026.

UKRAINE OFFICIAL: IT'S LIKE CRIMEA BUT FASTER

The route is a mix of new and upgraded roads to connect stretches of existing highway. It will run for 630 km once finished, according to Russia's federal road agency and transport ministry. They haven't given a planned completion date.

The construction and repair of bridges and interchanges, the widening of roads, and even the clearing of brush along roads are visible from satellite imagery.

Road crews have completed most of a 100 km section between Taganrog in southwestern Russia and near Manhush in occupied Donetsk, according to the Reuters analysis. Russia is also constructing a major new bypass road around Mariupol, which was largely levelled by fighting early in the war, the analysis shows.

The Novorossiya Highway forms the occupied territories' leg of the giant Azov Ring. Russian officials say they plan to complete that highway in 2030, linking Russia's Rostov-on-Don to Mariupol in Donetsk and cities in Zaporizhzhia and Crimea.

Olha Kuryshko is Ukraine's presidential representative for Crimea, tasked with monitoring the rights of Ukrainians living there. Kuryshko said Russia's drive to roll out economic infrastructure in eastern and southern Ukraine was similar to what it did in annexed Crimea – except this time it's happening much faster.

After Moscow seized Crimea from Ukraine in 2014, it embarked on a series of ambitious projects there including the Crimean Bridge, a monumental 19-km road and rail span, as well as a new highway and two power stations to provide stable electricity to the peninsula after the annexation, when the region was cut off from Ukraine's energy supply.

"The Russians have accomplished as much in three years of occupation of the new territories as they have in 10 years in Crimea, according to our analysis," said Kuryshko. "They've carried it out so rapidly, spent so much money, taken everything up a notch from what they did in Crimea," she added. "Crimea was their training ground."

KREMLIN COMMANDEERS UKRAINE'S PORTS

Russia has also moved to harness Ukraine's occupied ports on the Sea of Azov, a shallow inland sea bounded by Russia and Ukraine that connects to the Black Sea via the Kerch Strait. The Sea of Azov has been a major trade route for centuries.

In August, Moscow added Mariupol and Berdiansk on the Azov sea to a public list of Russian ports open to international vessels, a move denounced by Kyiv. Both hubs are being dredged and the canals leading to them deepened and widened to allow larger ships to navigate them once again. Those projects are among construction tenders for the two ports worth more than $13 million that have been posted on the Russian state procurement website since 2023.

Two veteran dock workers at Mariupol, who spoke on condition of anonymity, told Reuters the port has become significantly busier in recent months. Vessels are coming and going loaded with grain and coal, they said, while adding that activity remains below pre-war levels.

Between July and November last year, 18 cargo vessels operated by Russian and foreign companies have been recorded departing from Mariupol and Berdiansk ports, with most bound for ports in Turkey, according to an analysis of LSEG vessel-tracking data. Reuters couldn't determine what was transported by the vessels. Turkish authorities did not respond to a request for comment on the journeys.

In 2024, no vessels entered or exited the two ports, according to LSEG data.

The Russians are extracting valuable natural resources from the occupied territories.

Russian customs data, provided by a commercial trade data provider, shows 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. The commodity was also shipped 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 also been expanding Russian control over the seized Ukrainian territories' natural resources via state auctions.

Dozens of assets, ranging from mines to quarries and farm land, are being placed on the block in online state auctions, according to public auction documents reviewed by Reuters. Among assets sold so far are the rights to extract sandstone, crushed stone, granite and chalk from four mines in the Luhansk region.

One of the biggest sales to date has been the rights to develop the Bobrykivske gold mine in Luhansk. It was snapped up for $9.7 million by Alchevskpromgroup, which is controlled by Russian mining company Polyanka, according to documents of the sale. Polyanka mostly develops mines in the far east of Russia.

Bobrykivske's reserves contain about 1.64 tons of gold, which would be worth almost $260 million based on current spot prices, according to the auction documents.

Australian mining company Korab Resources had previously been developing the site. But Korab halted its work in 2014 when the area was seized by Russian-backed separatists, making it impossible for the company to access the region, which came under Western sanctions, and it wrote off the value of the project, according to Executive Chairman Andrej Karpinski and publicly available Ukrainian corporate records.

A satellite image taken of the deposit in September showed what appeared to be tire tracks all around the site. When asked by Reuters to compare the image with shots taken in June 2024, Karpinski told Reuters that work had already begun at the site. He pointed out what appeared to be an excavator in the main pit and shipping containers set up at the foot of a stockpile of rocks extracted from the mine.

Alchevskpromgroup, Polyanka and the Russian mineral resources ministry didn't respond to questions related to Bobrykivske's sale and whether work had started on the site.

Hird, at the Institute for the Study of War, said there are significant costs to occupying such a large amount of territory. Russia's ability to harness the natural and industrial resources of the regions could prove important for its finances, which have been severely strained by the war effort and international sanctions, she added.

"That can start tipping the scale to the point where the occupation actually becomes profitable to Russia," Hird said.