Ukraine is set to receive €1.89 billion soon under the European Union's Ukraine Facility program, with a total expectation of €16 billion for this year.
The EU has finalized Ukraine's plan, necessary for implementing the €50 billion Ukraine Facility program.
This was announced by Ukrainian Prime Minister Denys Shmyhal and the Ministry of Finance.
Details of the Funding
Prime Minister Shmyhal shared on Telegram that the approval of the plan allows the full launch of the Ukraine Facility, with the initial €1.89 billion to be received shortly.
He added that these funds would bolster Ukraine's financial stability amidst the ongoing war with Russia.
Shmyhal expressed gratitude to Belgium, which currently holds the presidency of the EU Council, and to EU member states for their strong support and high assessment of Ukraine's plan.
The Ministry of Finance noted that the procedure for initiating direct budgetary support under the first component of the Ukraine Facility is nearly complete.
Subsequent budgetary support will be provided quarterly upon meeting the indicators specified in Ukraine's plan.
Long-term Impact
Finance Minister Serhiy Marchenko highlighted that implementing the plan's indicators will lay the foundation for effective recovery, reconstruction, and modernization of Ukraine, moving closer to EU integration.
The document was developed according to EU standards and requirements, in constant consultation with the European Commission.
Many of the proposed reforms align with other support programs from the IMF, the World Bank, and euro-integration objectives.
The Ministry of Finance is responsible for three key areas of the plan: public finance management, anti-money laundering, and financial markets.
It also co-manages sections on state asset management, human capital, business environment, decentralization and regional policy, transport, agri-food sector, and critical materials management.
EU Support and Investment
In April, the European Commission endorsed the Ukrainian government's reform plan under the Ukraine Facility mechanism.
This outlines the conditions for receiving €50 billion in macro-financial assistance from 2024 to 2027. Of this, €39 billion will be directed to the state budget to enhance macro-financial stability.
The program also includes a special investment instrument to cover risks in priority sectors, amounting to €8 billion. Investors will be able to access funding through the EBRD, EIB, and other international institutions, potentially attracting an additional €30 billion in investments.
Implementation and Oversight
The decision to provide €50 billion to Ukraine was made during a European Council meeting on February 1. The funds will be disbursed over four years. Based on the Commission's annual implementation report, the European Council will hold yearly debates to provide guidance on the Ukraine Facility.
The first tranche of €4.5 billion in transitional financing was allocated in March. In late April, Ukraine received another €1.5 billion in external funding from the EU to cover the budget deficit.
These funds are critical for Ukraine as it continues to face significant economic and security challenges amidst the ongoing conflict with Russia. The support from the EU highlights the international community's commitment to assisting Ukraine in its time of need.
