European Commission approves plan for Ukraine Facility

The European Commission (EC) has approved the Plan for the Ukraine Facility and proposed to adopt the document to the EU Council. This is stated in the statement of the institution.

«his important step paves the way for regular and predictable support to Ukraine under the EU’s up to €50 billion Ukraine Facility. Financing under the Facility will help Ukraine to keep its administration running, pay salaries and pensions, provide basic public services, and support recovery and reconstruction while it continues to defend itself against Russia’s aggression,» the EC said in a statement.

EU member states now have one month to adopt the Council Implementing Decision proposed by the EC. Its adoption will allow the European Commission to provide up to €1.89 billion in pre-financing until regular disbursements related to the implementation of reforms and investment indicators under the Ukraine Plan begin.

The Ukraine Facility, which was approved on March 1, 2024, provides stable financing of up to €50 billion in grants and loans to support Ukraine’s recovery, reconstruction and modernization for 2024-2027.

Of this amount, up to €32 billion is tentatively earmarked to support the reforms and investments envisaged in the Ukraine Plan, under which disbursements will be conditional on the achievement of certain targets. Around €7 billion will be mobilized to support investment and access to finance, and around €5 billion is earmarked for technical assistance to support reforms and related measures. Another €6 billion is earmarked for exceptional interim financing, €4.5 billion of which the EU has already disbursed in March.

According to the EC, the reforms and investments proposed in the Council’s recommended executive decision have significant potential to accelerate growth, maintain macroeconomic stability, improve the financial situation and support Ukraine’s further integration with the EU.

If all proposed reforms and investments are fully implemented, Ukraine’s GDP could increase by 6.2% by 2027 and by 14.2% by 2040. Implementation of the Plan could also lead to a reduction in debt by about 10 percentage points of GDP by 2033.

As GMK Center reported earlier, the investment mechanism under the Ukraine Facility will help attract at least $30 billion in additional investment over the next four years by providing guarantees to international financial organizations, according to First Vice Prime Minister and Minister of Economy Yulia Svyrydenko.