Kyiv to receive 4.2 billion euros as EU Council approves first Ukraine Fund payment
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Kyiv will receive approximately 4.2 billion euros following the European Council's approval of the first regular payment of grants and loans under the EU Fund for Ukraine, RBC-Ukraine reported on Aug. 6.
The European Council has confirmed that Ukraine has met the necessary conditions and implemented the required reforms to receive funds under the Ukraine Facility program. The reforms encompass critical areas such as public finance management, state-owned enterprises, the business environment, energy, and demining.
"The Council emphasized the importance of the timely allocation of funds given Ukraine's challenging fiscal situation," the European Council stated.
The Ukraine Facility outlines the country's recovery, reconstruction, and modernization goals, as well as the reforms planned for its EU membership process over the next four years. In May 2024, the EU Council acknowledged that Ukraine's plan meets the preliminary conditions for up to 50 billion euros in support under the Fund for Ukraine.
Ukraine has already received 6 billion euros in transitional financing under the Ukraine Facility and expects an additional 1.9 billion euros by the end of June, with subsequent tranches dependent on Kyiv fulfilling the terms of the Ukraine Plan. In November 2023, it was reported that the European Union could advance approximately 7 billion euros to support Ukraine's macro-financial stability.
On February 1, all 27 EU member states agreed to a four-year aid package for Ukraine worth 50 billion euros, which was initially blocked by Hungary. Of this amount, 38.27 billion euros will support the state budget, 6.97 billion euros will go to the investment fund, and 4.76 billion euros will provide technical and administrative support.
Government representatives have detailed what the EU will require from Ukraine in exchange for this funding. On May 14, 2024, the Council of the EU approved the Plan for the Ukraine Facility, developed in collaboration with European partners, outlining structural reforms from 2024-2027. This plan aims not only at recovery and reconstruction but also at advancing Ukraine's EU accession and supporting European integration processes.
On June 6, the Verkhovna Rada ratified the Framework Agreement between Ukraine and the EU on special mechanisms for implementing EU financing under the Ukraine Facility. This agreement, signed in late May, sets the principles of financial cooperation, particularly regarding the management and control of fund usage. The institution noted that the agreement officially launched the implementation of Ukraine's Plan.
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