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Luxembourg, the Netherlands, Norway, Spain, Switzerland, Britain, the EU, the World Bank, USAID, The Council of Europe Development Bank, the EBRD, the EIB, the EIF, the IOM, and others joined the new organization. All founding members will contribute to the alliance through financial investment, policy advice, or developmental programs. Total commitments for the next four years will amount to more than €7B for current and new SME programs, of which more than €4.5B is financing for new projects. The main contribution of €3.9B will come through the Ukraine Facility program, and Ukrainian SMEs will have access to financial instruments under the Ukraine Investment Framework. This package also provides new financing from the EBRD to meet the liquidity needs of Ukrainian companies and support war-affected enterprises and vulnerable population groups.
The EC will create an equity fund to promote Ukraine’s recovery. German Chancellor Olaf Scholz reported that his country and its European partners are already defining decisive guidelines and essential prerequisites for Ukraine’s successful recovery. "Recovery will require large investments, which is impossible without private capital. We are talking about the recovery of a country - a future member of the EU. Ukraine has huge potential in the field of renewable energy and hydrogen, as well as promising sectors such as digitalization and IT, health care and the pharmaceutical industry," he said. Scholz noted that Germany and its partners strive to support the expansion of the economic development fund. This primarily involves helping small and medium-sized enterprises. In addition, Scholz emphasized that Ukraine currently needs opportunities to improve businesses’ access to European capital. "Therefore, the EC will create an equity fund that will mobilize important funds for Ukraine," he said.
Ukraine has finally ratified the agreement with the EU on financing under the Ukraine Facility program: it is expected to attract €1.89B in June. Ratification of the agreement will include the necessary control and audit mechanisms for the €50B instrument that is in place from 2024 through 2027, subject to the successful implementation of the Plan of Ukraine. Ukraine has already received €6B this year from the Ukraine Facility. After ratification, €1.89B in pre-financing is expected in June. Another €8.2B will be provided "in exchange for reforms." According to the Ministry of Economy, the Framework Agreement Ukraine must ensure a high level of transparency and control in the use of funds provided by the EU. To accomplish this, mechanisms will be created to prevent corruption risks, and institutional capacity for monitoring and control will be strengthened. The agreement envisages close cooperation between Ukrainian state authorities and EU institutions, which will also contribute to European integration.
The European Commission is deliberating the use of future interest from frozen Russian assets to fund a multi-billion-dollar loan to Ukraine and guaranteeing this money through a seven-year EU budget commitment of €1.2T, writes Politico. The governments of all EU countries must unanimously agree to amend the bloc's seven-year budget, and the European Parliament must green light the move. The implementation of this idea would be a serious step forward from the established EU plan to use most of the €3B in annual profit from Russian assets to purchase weapons for Ukraine
France will provide €650M to help Ukraine in critical sectors. During President Volodymyr Zelenskiy's visit to France, two agreements will be signed that will provide support for key sectors of the economy and critical infrastructure. The French Development Agency (AFD) will provide a €400M loan and €50M in grants between now and 2027 to expand its activities in Ukraine. The funds will go to support the energy and transport sectors. The second agreement, for €200M, will create a bilateral fund to support projects involving companies with a French share of capital. These funds will be used to finance major projects, strengthen or replace failing energy infrastructure, and support transport, water supply, health care, and agriculture. On June 6,
79 UKRAINE Country Report July 2024 www.intellinews.com