The European Commission on Wednesday approved the disbursement of the first regular tranche of EUR4.2 billion of budget support to Ukraine under the Ukraine Facility and is awaiting a final decision by the EU Council as soon as possible, according to a press release from the European Commission.
“Despite all the difficulties, Ukraine has been implementing key reforms to restore its economy and move forward on its path to the EU. This has allowed the Commission to give the green light for additional payments to Ukraine of almost EUR4.2 billion, and I believe that the Council will quickly give its approval,” the release quotes European Commission President Ursula von der Leyen as saying.
It is specified that, once approved by the Council, this decision will bring the total amount of funds allocated by the EU to Ukraine since the launch of the Ukraine Facility in March this year to EUR 12 billion.
The European Commission recalled that regular quarterly disbursements under the Ukraine Facility are subject to Ukraine’s fulfillment of pre-agreed requirements and ensure the predictability of financial assistance.
It is indicated that, based on the results of the assessment of the disbursement request submitted by Ukraine on July 9, 2024, the Commission concluded that Ukraine has satisfactorily implemented nine reform indicators related to the first regular payment in support of the Ukraine Plan – Ukraine’s reform and investment strategy for the next four years. These reforms cover public financial management, management of state-owned enterprises, business environment, energy, and mine action. In particular, the press release highlights the reform of the Bureau of Economic Security, the adoption of new corporate governance standards for state-owned enterprises, and the National Energy and Climate Plan, which coordinates and plans energy and climate policy until 2030 with specific goals, including a significant reduction in greenhouse gas emissions and an increase in the share of renewable energy sources.
Ukraine Facility is an instrument that provides for the possibility of Ukraine receiving EU financial and technical assistance totaling EUR 50 billion in 2024-2027. Of this amount, EUR 38.27 billion is allocated for budget support (including EUR 5.27 billion in grants), EUR 6.97 billion for the investment fund, and EUR 4.76 billion for technical and administrative support.
The state budget for 2024 has already received EUR 7.9 billion under the Ukraine Facility: EUR 6 billion in two tranches of transitional financing and a tranche of EUR 1.9 billion of unconditional financing.
To receive the next tranches, Ukraine must submit a duly justified request for disbursement on a quarterly basis until the end of 2027. The Commission will then assess whether Ukraine has satisfactorily fulfilled the conditions set out in the Council decision.
