EU loan for Ukraine provides 45 billion euros annually - how and for what purposes the funds are divided
Kyiv • UNN
The EU Council approved the Ukraine Support Loan, which will be repaid from Russian reparations. The funds will be directed to budget support and defense needs.
The EU-approved Ukraine Support Loan for Ukraine, amounting to €90 billion for 2026-2027, envisages €45 billion annually, with the first tranche expected in the coming month, the Ministry of Finance announced on Thursday, writes UNN.
What decision did the EU make?
The EU Council approved the final decision necessary to launch a new financial instrument for Ukraine – the Ukraine Support Loan, amounting to up to €90 billion for 2026–2027. The funding, as indicated by the Ministry of Finance, will be raised through EU borrowing on international capital markets, and the obligations will be secured by the European Union's budget reserve.
To provide the loan, amendments were made to the EU's multiannual financial framework (MFF) for 2021-2027, which creates the legal basis for borrowing and subsequent allocation of funds to Ukraine, the Ministry of Finance noted.
"The loan must be repaid from reparations that Russia must pay to Ukraine," the EU Council reported.
The EU's financial assistance, the Ministry of Finance noted, will also support Ukraine's path as a candidate country for EU membership by supporting reforms in the rule of law and public administration, strengthening the European defense-industrial base, and cooperation in defense technologies.
The provisions on the Ukraine Support Loan were agreed upon within the framework of the enhanced cooperation procedure involving 24 member states. Today, the EU adopted an implementing decision with the support of all 24 member states participating in enhanced cooperation. Exceptions were granted to Hungary, Slovakia, and the Czech Republic.
How the funds are divided
It is expected that in 2026 and 2027, Ukraine will receive €45 billion annually. Specifically, in 2026:
- €16.7 billion (€8.35 billion within macro-financial assistance, €8.35 billion through the Ukraine Facility) will be directed to budget support;
- €28.3 billion – for defense needs.
As reported by the EU Council, a total of €30 billion from the entire loan amount is earmarked for macroeconomic support for Ukraine through macro-financial assistance or through the Ukraine Facility, and these funds can be used to meet Ukraine's most urgent budget needs.
And €60 billion - for developing Ukraine's capacity for investments in defense-industrial capabilities, including the procurement of defense products. "The funding will provide Ukraine with extremely important and timely access to defense products from defense enterprises in Ukraine, the EU, EEA-EFTA countries, as well as other third countries. These third countries must either conclude a bilateral agreement with the Union within the framework of the SAFE instrument (EU financial instrument for assisting member states in defense investments) or demonstrate compliance with specific conditions and obligations," the European institution reported.
In addition, exceptions may apply "if Ukraine's military needs require urgent supply of defense products unavailable in Ukraine, the EU, EEA-EFTA countries, or specified third countries."
The allocation of funds, the EU Council indicated, will be carried out in accordance with Ukraine's financial needs, as defined by the financial strategy developed by Ukraine itself.
When is the first tranche expected?
"The first tranche is planned to be attracted in the coming month, which will contribute to the stability of the economy during the war," the Ministry of Finance reported.
As indicated by the EU Council, today's decision "will allow the European Commission to start payments as soon as possible, in the second quarter of 2026."
"The EU's €90 billion instrument will become one of the key elements of Ukraine's financial stability in 2026-2027. I thank our partners for effective cooperation, which helps maintain Ukraine's financial stability despite significant defense and recovery costs. The adopted decision guarantees the continuity of funding during the fight against Russian aggression," commented Ukraine's Minister of Finance Serhiy Marchenko.
Addition
At the summit on December 18-19 last year, the leaders of the EU member states confirmed their readiness to help Ukraine ensure financial stability in 2026-2027. The parties agreed to provide Ukraine with €90 billion. On January 14, the European Commission officially presented a proposal to launch a new financial instrument for Ukraine.