The new Ukraine Facility will provide stable and sustainable financing to support Ukraine's recovery, reconstruction, and modernisation, including key reforms necessary on its EU accession track. The overall amount of the Facility for the period of 2024-2027 is €50 billion. This amount is composed of €17 billion in grants and €33 billion in loans.
The Ukraine Facility is structured in three pillars :
1. Direct support to the State budget based on a plan to be developed by Ukraine for the recovery, reconstruction and modernisation of the country, including a set of related reforms and investments.
2. An investment framework to attract public and private investment for Ukraine's recovery and reconstruction, composed of guarantees and blended finance (a mix of loans and EU grants).
3. Technical assistance and other support measures to the reforms, as well as grants covering the borrowing costs of loans to the Government of Ukraine.
It will be equipped with a robust framework for audit and control, to ensure the protection of EU financial interests, while at the same time supporting the further improvement of Ukraine's system of internal controls as part of the reforms under the plan.
Today's political agreement also paves the way for the so-called ‘exceptional bridge financing', under the Facility. This means immediate support of up to €1.5 billion per month for a limited period, while the other elements of the Facility are being put in place such as the Ukraine Plan or the establishment of the Audit Board. First payments under the Facility can take place very soon after its entry into force, expected as early as March. This crucial support will ensure that Ukraine can continue focusing efforts on winning the war and will finance the functioning of the state, such as paying salaries, pensions, and providing basic public services.
To finance the loan support, the European Union will raise €33 billion on the financial market until end of 2027 by issuing EU Bonds under the unified funding strategy. This financing is backed by the headroom of the EU budget. The amounts needed will be accommodated within the EU's debt issuance programme over this period.
The non-repayable support will be financed through the EU annual budget under a new special instrument, the “Ukraine Reserve”, over and above the MFF expenditure ceiling. This instrument will be mobilised every year in the context of the annual budgetary procedure to best take into account progress in implementation of EU assistance and reforms and possible evolving needs, depending on the evolution of situation on the ground.
Source : EC official