Ukraine to receive €6 billion in transitional funding from the EU: agreement signed
Kyiv • UNN
Ukraine and the European Union have signed an agreement to provide €6 billion in soft loans to Ukraine, of which €4.5 billion will be disbursed in March and the remaining €1.5 billion in April 2024 after the reform indicators are met.
Ukraine and the European Union have signed a loan agreement and a Memorandum on Transitional Financing for Ukraine under the Ukraine Facility. The total amount of concessional funds provided is EUR 6 billion, UNN reports with reference to the Ministry of Finance.
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The signatories from Ukraine were Minister of Finance Sergii Marchenko, First Vice Prime Minister and Minister of Economy Yuliia Svyrydenko and Governor of the National Bank Andrii Pyshnyi.
The first installment of EUR 4.5 billion is expected to be transferred to the State Budget of Ukraine in March. The rest of this amount - EUR 1.5 billion - will be received in April 2024 after the European Commission assesses the fulfillment of the indicators. As part of the transitional financing mechanism, Ukraine is implementing 5 indicators in the areas of public finance management, anti-corruption, business environment development, etc.
"I am grateful to the European Union for the significant and timely financial support. The Transitional Financing Mechanism will allow us to meet the urgent budget needs until the final approval of the Ukraine Facility Plan, which provides for the indicators of reforms implementation during 2024-2027. Our fruitful cooperation with the European institutions continues to contribute to the strengthening of Ukraine's macro-financial stability, further economic growth and approximation to full EU membership," Mr. Marchenko said.
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After the approval of the Ukraine Plan for the Ukraine Facility, the state budget is expected to receive EUR 1.9 billion in unconditional funding. The rest of the budget support will be disbursed on a quarterly basis after the fulfillment of the indicators set out in the Ukraine Plan.
"Together with our European partners, we are finalizing the Plan for the Ukraine Facility and preparing for the full launch of the program. We have made significant progress. [The signing of the Agreement will allow us to start financing even before the official approval of the Plan and will provide EUR 6 billion to cover the current needs of the state budget in March and April this year," Svyrydenko said.
As a reminder, €50 billion under the Ukraine Facility will be allocated to budget support (€38.27 billion), an investment fund (€6.97 billion), and technical and administrative support (€4.76 billion).
