Ukraine and the EU have signed an agreement on financing under a record program: when will the money come? All the details

Ukraine and the European Union (EU) have signed an agreement to actually start disbursements under the record-breaking EU assistance program Ukraine Facility in March 2024. By the end of the month, Ukraine's accounts will receive €4.5 billion. This tranche will essentially contain three "money transfers" at once - €1.5 billion for each month from the beginning of 2024 (January, February and March).

According to the Ministry of Finance, Ukraine signed the relevant loan agreement and memorandum on March 12. However, Ukraine will receive the second tranche of the EU's assistance in April in the amount of EUR 1.5 billion, and only if the reform program is implemented.

"Ukraine will receive EUR 6 billion in transitional financing under the EU's Ukraine Facility. The first payment of EUR 4.5 billion will be transferred to the state budget of Ukraine in March. The remaining amount of EUR 1.5 billion will be received in April 2024 after the European Commission assesses the fulfillment of the indicators," the Ministry of Finance explained.

Earlier, on March 8, the first disbursements from the Ukraine Facility were announced by the Executive Vice President of the European Commission (EC), Valdis Dombrovskis, at a joint briefing with Prime Minister Denys Shmyhal. In addition, the same day, the Cabinet of Ministers of Ukraine approved the documents for receiving the funds."The European Union has launched a four-year program for Ukraine worth €50 billion - the Ukraine Facility. In the next 2 months, Ukraine will be able to receive 6 billion euros of this amount," Shmyhal said at the time.

"We are finalizing the mechanism of support for Ukraine, which is called the Ukraine Facility. We have developed it for 4 years and we believe that it will provide a predictable and predictable flow of funding to Ukraine starting this year and until 2027, totaling 50 billion euros," Dombrovskis said.

According to Dombrovskis, since the beginning of the war, the EU's assistance to Ukraine has reached almost 88 billion euros."We are ready to continue to provide financial, military and any other kind of assistance to Ukraine," the EC representative said.

EU assistance: what the money will be used for

As explained by the Ministry of Finance, the funds received under the plan should be used to support the state budget and implement projects to restore the country. "The program will complement existing instruments to support Ukraine. Such as budget guarantees, financial instruments and other financing for private sector development," the Ministry said.

In addition, the program also provides for a special investment instrument to cover risks in priority sectors, which will amount to €8 billion. Funding under this instrument will be available to investors through the EBRD, EIB and other international institutions. It is expected that the implementation of projects under this instrument will attract an additional €30 billion in investments.

"In addition, the budget of the Ukraine Facility program provides for a separate area of technical support. In particular, funds to cover interest on loans under the Ukraine Facility, which will amount to €3 billion," the Ministry of Economy clarified.

EUR50 billion from the EU to Ukraine: program terms and conditions

Ukraine will receive assistance for 4 years, i.e. until 2027. The money will be allocated both in the form of loans and non-refundable grants.

However, the EU will not give money for free - its receipt is tied to Ukraine's implementation of a number of reforms. The European Commission will check compliance with the approved plan every three months.

If Ukraine complies with the plan, the EU will transfer a tranche of aid. If not, no funding will be provided. We are talking about changes in the following areas:

• public administration and public finance management;
• the judiciary, the fight against corruption and money laundering;
• financial markets;
• management of state assets;
• human capital and business environment;
• regional policy and decentralization;
• energy sector, green transition and environmental protection;
• transportation
• agri-food sector;
• digital transformation.

Ukraine declares a clear intention to adhere to these reforms - at the end of 2023, the Cabinet of Ministers approved a draft plan for the Ukraine Facility program. "Together with business, the public sector, the deputy corps, and the regions, we have done a great job of creating it," Prime Minister Denys Shmyhal said at the time.

As reported by OBOZ.UA, at the same time, US assistance to Ukraine is delayed. The package of financial support for our country will be considered in Congress no earlier than mid-March.

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