The United States Agency for International Development (USAID) has tripled its grant support under the Competitive Economy of Ukraine program to $11 million, the Ministry of Economy reported on its website on Thursday.
It is noted that the decision was made taking into account the large number of applications and significant interest from processing enterprises.
The increase in funding will also increase the number of grants by about three times, to about 75.
It is specified that the grants will support businesses in the production of innovative products, modernization of production, reduction of manual labor, import substitution and export growth to fill niches previously occupied by Russian and Belarusian products, and localization of production of goods necessary for recovery.
USAID’s Competitive Economy Program supports Ukrainian businesses to improve their competitiveness in Ukraine’s domestic and international markets, helps build a simplified and transparent business climate, and provides Ukrainian companies with opportunities to take advantage of international trade.
Ukraine’s Finance Minister Sergii Marchenko has signed a EUR50 million grant agreement with the German state development bank KfW to compensate for the interest rate costs for small and medium-sized businesses under the state program “Affordable Loans 5-7-9%,” the ministry’s press service said on Thursday.
“The funds will be used to refinance the costs of the Affordable Loans 5-7-9% program, which will allow small and medium-sized businesses to continue to have access to preferential lending,” Marchenko said and expressed gratitude to the German government for its cooperation and systemic support of Ukraine.
He emphasized that the allocated EUR 50 million will make a significant contribution to the improvement of existing business financial support programs.
The Minister also noted that the Entrepreneurship Development Fund (EDF) is a key institution of affordable financing for Ukrainian business aimed at restoring and developing entrepreneurship under martial law.
“The German government continues to support the Ukrainian side and facilitates further grants,” said Ulrike Hopp-Nishanka, Head of the Headquarters for Ukraine at the Federal Ministry for Economic Development and Cooperation (BMZ).
She reminded that last year KfW provided EUR 150 million for the 5-7-9 program.
“These funds are an important component of German-Ukrainian development cooperation, the total amount of which in 2023 alone was more than EUR 600 million,” Hopp-Nishanka said.
A $1.25 billion grant from the United States was transferred to Ukraine’s state budget on Thursday through the World Bank’s Multi-Donor Trust Fund, the Ministry of Finance reported.
It clarified that the funds are part of the fifth additional financing under the World Bank’s Public Expenditure Support for Enhanced Accountability and Sustainable Governance in Ukraine (PEACE in Ukraine) project.
Its goal is to partially compensate for state budget expenditures, including social and humanitarian expenditures not related to security and defense.
In 2023, Ukraine received $9.7 billion in direct budget support from the United States in the form of grants. The funding is used to reimburse state budget expenditures: pension payments, payments to the State Emergency Service, salaries for healthcare workers providing services under the Medical Guarantee Program, civil servants and teachers.
“Since the beginning of the full-scale war, the state budget of Ukraine has already received $21.7 billion from the United States. Financial assistance from the United States is provided on a non-refundable basis, which allows us not to increase the debt burden on the state budget. I am grateful to the US government for its solidarity and large-scale support,” Minister of Finance of Ukraine Sergii Marchenko said in a press release.
As reported, the government of Ukraine expects to receive another $3.3 billion from the United States by the end of this year, and $12-14 billion next year, but for this to happen, U.S. lawmakers must approve the relevant federal budgets. Discussions on this issue are still ongoing.
The Ministry of Finance added that together with Deloitte Consulting, which is implementing the USAID SOERA project, it is monitoring the use of direct budget support from the US government, and with the auditing company PriceWaterhouseCoopers Ukraine, it is checking the agreed procedures to determine the allowable public expenditures made by Ukraine in 2022.
In addition, to increase the transparency and accountability of the use of external financing, the Ministry of Finance publishes detailed information on the state budget expenditures of 2022 and the first quarter of 2023, which were compensated by foreign partners, in particular the United States, under the World Bank’s PEACE in Ukraine project.
Chanta Mount LLC (Novi Petrivtsi, Vyshgorod district, Kyiv region) has received UAH 8 million in non-refundable grant aid from the state for the New Level processing plant, which will help it resume production of frozen bread, the press service of the Ministry of Economy of Ukraine reports.
According to the report, in March 2022, the bakery was damaged by shelling by the Russian occupiers. The bread production line was almost completely destroyed, and the croissant production line was partially destroyed: six shells hit the premises. The damage was estimated at more than EUR 5 million. Before the war, the plant employed 140 people, now it has about 40.
“The bread production line was destroyed by Russian troops with Grad rockets on March 16, 2022. The epicenter of the explosion was in the part where we freeze and pack bread. (…) Only because there was a curfew, our people were not injured. We immediately realized that we could not cope with the recovery alone, so we needed to look for grant opportunities,” the press service quoted the bakery’s director, Elena Taranenko, as saying.
The company’s management has applied for participation in the government’s program of non-refundable grants for processing enterprises from the Ministry of Economy and will receive the maximum amount of UAH 8 million.
“We have to make our contribution of UAH 4 million. The grant money will be used to buy freezing and refrigeration equipment,” said Taranenko.
In addition, to launch the bread production line, it is necessary to equip the packaging department and build a warehouse for finished products. This will require EUR 2 million.
In the spring of 2024, the bakery plans to resume full production and supply frozen bread to ATB, Silpo, Fora, Novus, METRO, Auchan, Epicenter, and Varus supermarkets.
Meanwhile, the croissant production line is reportedly already in operation. The frozen croissants are sold to national retail chains, bakeries, cafes, supermarkets, and for export. So far, up to 1.5-2 tons are baked daily, but the potential capacity is over 400 kg/hour.
The Ministry of Economy reminded that the government’s e-Work project includes grant programs aimed at stimulating entrepreneurship and job creation. Microgrants are issued for starting or developing your own business, including processing enterprises, planting a garden, vineyard, or greenhouse. Both existing entrepreneurs and people with no business experience can apply for a grant.
In 2022, Chanta Mount LLC received UAH 26.441 million in revenue, while a year earlier it received UAH 181.4 million, and the loss increased to UAH 94.409 million from UAH 3.1 million in 2021.
According to Opendatabot, Chanta Mount LLC was registered in 2018, and the ultimate beneficiary is Olena Chernysheva. The company’s authorized capital is UAH 23.7 million.
Another $1.25 billion grant from the United States arrived in Ukraine on Monday through the multi-donor World Bank Trust Fund, the Finance Ministry said.
“Irrevocable financial assistance from the United States is an extremely important element in supporting Ukraine’s state budget while it resists Russia’s full-scale aggression. The next grant will help the Ukrainian government to reimburse priority expenditures in the social and humanitarian sphere,” Finance Minister Serhiy Marchenko was quoted as saying in the release.
The Finance Ministry specified that in 2023 Ukraine has already received $8.45 billion in grants of direct budgetary support from the United States, and in total, $20.4 billion in grants from the United States have been received in the state budget since the beginning of the full-scale war.
As previously stated by the Ministry of Finance, as of July 21 this year, the state budget of Ukraine received funding from international partners in the amount of $23.6 billion, compared to $32.1 billion last year, while the need for this year is about $42 billion.
Since then, the budget has also received EUR1.5bn of the sixth tranche of EU macrofinancial assistance and $1.5bn through the World Bank’s Trust Fund mechanism under the guarantees of the Japanese government.
NEC Ukrenergo, the Ministry of Energy and the Ministry of Finance have signed two agreements with the World Bank to provide the company with $240 million in grant aid to improve the reliability of the energy system, Ukrenergo Chairman of the Board Volodymyr Kudrytskyy said.
“Almost $240 million is another significant contribution from our international partners to ensure the sustainability of our connection to the European energy system and the restoration of high-voltage substations,” he wrote on his Facebook on Tuesday evening.
According to his message, the first agreement provides Ukrenergo with grant funds from the German government, which will be used for the purchase and installation of STATCOM – special devices that increase the stable operation of the power grid.
“Ukrenergo fulfills an important technical condition of ENTSO-E to strengthen our connection to the European grid. STATCOM devices will not only increase the stability of the Ukrainian energy system, but will also have a positive impact on the balance of the entire interconnected European continental grid,” Kudrytskyi explained.
Another document determines the transfer of assistance to the NEC for the purchase of special equipment, autotransformers and other high-voltage equipment damaged by Russian missile and drone strikes.
At the same time, the head of Ukrenergo thanked the Ukrainian government, WB Vice President for Europe and Central Asia Antonella Bassani and WB Regional Director for Eastern Europe Arup Banerjee “for the fruitful joint cooperation and strengthening of Ukraine’s energy security”.
