EU finalises requirements for Ukraine to receive aid
14 May 2024 14:23
The European Union has finally approved the Ukraine Plan required to implement the €50 billion Ukraine Facility programme. This was announced by the Prime Minister of Ukraine Denys Shmyhal, "Komersant Ukrainian" reports
“The approval of the Plan allows us to fully launch the Ukraine Facility – our country will receive €1.89 billion in the near future. In total, this year we expect to attract EUR 16 billion under the programme. This will strengthen our financial stability in the face of a full-scale war with Russia,”
– shmyhal wrote on social media.
Ukraine Facility
The Ukraine Facility is a €50 billion financing mechanism for Ukraine for the period 2024-2027. The programme consists of €17 billion in grants and €33 billion in loans. The mechanism provides not only for financing budgetary areas in Ukraine during the war, but also for programmes aimed at implementing the reforms that are essential for Ukraine’s accession to the EU.
The EU’s support should be directed in three areas:
- Financial support for Ukraine to implement reforms and investments, and to maintain the country’s macro-financial stability, as envisaged in the Ukraine Plan to be developed by the Ukrainian government.
- Ukraine’s investment framework to mobilise investment and increase access to finance.
- Assistance on the path to European integration to mobilise technical expertise and build capacity.
on 20 March, Shmyhal reported that Ukraine had received €4.5 billion in transitional funding under the Ukraine Facility. on 24 April, it became known that the European Commission had allocated another tranche of macro-financial assistance to Ukraine as part of a €50 billion support package.
What does the Ukraine Facility plan envisage?
TheUkraine Facility Plan envisages the implementation of structural reforms in the public sector, a number of economic reforms aimed at developing the business climate and entrepreneurship, as well as steps to develop priority sectors that can ensure rapid economic growth. The implementation of the Plan will contribute to Ukraine’s European integration and further sustainable economic development.
TheUkraine Facility Plan includes more than 150 indicators in 69 reform areas to be implemented by 2027. The plan was developed in full synchronisation with Ukraine’s key international partners.
The Ukraine Facility Plan also includes 16 investment indicators that are part of the overall list of changes. To meet them, it is necessary to continue and strengthen programmes for infrastructure development, demining, renewable energy, support for small and medium-sized enterprises, etc.
Funding under the Ukraine Facility programme is directly dependent on the fulfilment of the indicators set out in the Ukraine Facility Plan. In 2024, more than 36 indicators are planned to be implemented in the areas of improving public financial management, fighting corruption, managing state property, developing human capital, improving the business environment and developing priority sectors.
The last instalment under the programme is expected to be disbursed in 2028 based on the performance of the indicators for the fourth quarter of 2027.
A €6 billion transitional financing mechanism is envisaged for the period until the final launch of the Ukraine Facility programme.
As part of the transitional financing arrangements, Ukraine is implementing 5 indicators in the areas of public financial management, anti-corruption, business environment development and land market functioning. Three of them have already been implemented, and two more steps required to receive transitional funding are under development.
