At today’s Ukraine Recovery Conference 2024 in Berlin, European Commission President Ursula von der Leyen announced the signature of €1.4 billion in new guarantee and grant agreements to support Ukraine’s recovery and reconstruction, as part of the Ukraine Facility’s Investment Framework. These agreements underscore the EU’s steadfast commitment to support Ukraine for as long as it takes.
Ursula von der Leyen, President of the European Commission said: “The European Union is rallying financial firepower to help Ukraine resist and recover. From the proceeds of immobilized Russian assets, to our €50 billion Ukraine Facility, we will make sure Ukraine has all the support it needs. Today, we are kicking off our investment plan under the Facility, signing the first agreements worth €1.4 billion with our partner banks to attract further private sector investments. The business community wants to step up its contribution. And together, we will help Ukraine resist and recover.”
These are the first agreements signed with international and bilateral public financial institutions under the Ukraine Investment Framework, the investment arm of the EU’s up to €50 billion Ukraine Facility to support Ukraine in the face of Russia’s ongoing war of aggression and on its path towards EU membership.
These agreements, comprised of €1 billion of loan guarantees and €400 million of blended finance grants, will benefit private companies, including small and medium-sized enterprises, municipalities and Ukrainian state-owned enterprises. They will notably focus on the repair, rehabilitation and development of energy infrastructure, which has been heavily targeted by Russia in recent months. Other programmes target the transport and municipal sectors, and access to finance for small and medium-sized enterprises, notably to businesses affected by the war in de-occupied and front-line regions.
The full list of programmes, which aim to unlock €6 billion in investments, includes:
- Initiatives in Support of Ukraine’s Private Sector – to enhance access to finance for small and medium-sized enterprises, including to war-affected companies. The EU is providing €190 million in guarantees and €10 million investment grants via the European Investment Bank (EIB) Group;
- Better Futures Programme, Resilience, Reconstruction, and Regeneration of Ukraine – to accelerate and scale-up investments in renewable energy such as wind power projects, battery energy storage systems, transport, digital sector, and industrial investments. including steel production, construction materials and processing. The EU will provide €350 million in guarantees and €17.5 million in technical assistance via the International Finance Corporation (IFC).
- Financial Inclusion Recovery Programme – to enhance access to finance for small and medium-sized enterprises and invest in their production capacity. The EU is providing €140 million in guarantees, €30 million in investment grants and €7 million in technical assistance via the European Bank for Reconstruction and Development (EBRD).
- Hi-Bar Programme – to mobilise finance to accelerate the net zero transition in the energy sector. The EU is providing €150 million in guarantees and €7.5 million in technical assistance via the EBRD.
- Municipal, Infrastructure and Industrial Resilience Programme – focused on emergency support and future reconstruction efforts across sectors, including industry, energy, municipal infrastructure. The EU is providing €150 million in guarantees, €25 million in investment grants, and €7.5 million in technical assistance via the EBRD.
- Promoting Green Lending via the Green for Growth Fund –to enhance access to financing for mid-caps and small and medium-sized enterprises, green and circular economy businesses, climate adaptation, energy efficiency and green transition. The EU is providing first loss capital of €45 million, €7 million in investment grants and €3 million in technical assistance via the Kreditanstalt für Wiederaufbau(KfW), the German Development bank.
- EU4Business, Lending to Micro and Small Enterprises via the EFSE Fund – to support the restoration and relocation of war-affected companies, micro and early-stage entrepreneurship, businesses in de-occupied/front-line regions, and the adaption of agricultural business. The EU is providing first loss capital of €45 million, €9 million in investment grants and €1 million in technical assistance via the KfW.
- Reconstruction and Rehabilitation of Electricity Transmission Infrastructure Programme – to strengthen the resilience of electricity transmission by investing in sustainable repairs and rehabilitation of electricity infrastructure as well as restoring access to electricity supply for critical infrastructures. The EU will provide €100 million investment grants via the KfW.
- Support for Ukrainian MSMEs Programme – to enhance access to finance for micro, small and medium-sized enterprises focusing on war-affected companies to help them to restore their business, including in de-occupied and front-line regions. The EU is providing €20 million in guarantees via Bank Gospodarstwa Krajowego (BGK).
- Municipal Infrastructure Development Programme tosupport water and sanitation investments, rehabilitation of water supply and sewage infrastructure in the City of Chernivtsi. The EU is providing €17.75 million in investment grants and €2 million in technical assistance via the KfW.
- Immediate Ukraine Extension of JASPERS (Joint Assistance to Support Projects in European Regions) – to provide capacity-building to prepare and implement large-scale infrastructure projects and advisory services for the Ukraine’s reconstruction. The EU is providing €10 million in technical assistance via the EIB.
Ukraine Recovery and Reconstruction Guarantee Facility – to provide war insurance for movable assets, such as in-land cargo transport. The EU is providing €50 million in guarantees via the EBRD to cover the risk of a fund which will in turn extend insurance coverage. Other donors will provide an additional €60 million in guarantee commitments.
Additional support
In light of the massive destruction of Ukraine’s energy infrastructure by Russia’s targeted attacks, the EU is deploying over 1,000 additional power generators from its rescEU strategic reserves. While also preparing for the upcoming winter, further rescEU stockpiles are being mobilised to send shelter equipment and medical supplies to Ukraine. The EU Civil Protection Mechanism has also helped to mobilise more than 15,000 solar panels to support Ukraine’s energy sector. With regard also to the energy sector, at the request of the European Commission, the Energy Community has established the Ukraine Energy Support Fund which has so far mobilised donations of around €500 million.
The EU has also announced at the conference increased support via its rapid response instruments for the Integrated Response Hub with an additional €18 million, bringing the total EU contribution to €36 million. The Hub provides equipment to respond to the needs in Ukraine ranging from critical infrastructure to electricity supplies, demining equipment and support to civilian security actors, to ensure access to justice in de-occupied areas and to collect evidence of war crimes.
To further support Ukraine’s reform efforts on its path to the EU, during the conference, the Commission also signed new Technical Assistance programmes worth over €100 million to help advance Ukraine’s reforms in areas such as decentralisation, education and skills, health, integrated border management and crisis response.
The EU also agreed to suspend Ukraine’s financial obligations related to its participation in Union programmes. To date, Ukraine is associated to fourteen EU programmes: Horizon Europe, EURATOM Research and Training Programme, Digital Europe, Fiscalis, Customs, Creative Europe, EU4Health, LIFE, Single Market Programme, Union Civil Protection Mechanism, Connecting Europe Facility, Union Anti-Fraud Programme, Justice programme, Citizens, Equality, Rights and Values programme.
Enhanced Donor Coordination
In the margins of the conference, Commission Executive Vice-President Valdis Dombrovskis chaired the first ministerial meeting of the Multi-agency Donor Coordination Platform. Participants reaffirmed their unwavering commitment to continue supporting Ukraine’s recovery and reconstruction efforts. Ukraine’s needs in the energy sector and its reforms progress were highlighted in the meeting.
The ministerial meeting also launched the Platform’s Business Advisory Council, bringing together business leaders, to provide advice on how the business environment in Ukraine can be bolstered to help the country attract private investment and achieve its vision of a modern, and greener economy integrated with Europe.
Background
Overall, since the start of the war, the support to Ukraine and Ukrainians amounts to almost €100 billion. This includes financial, humanitarian, emergency budget and military support to Ukraine from the EU, Member States and the European financial institutions, as well as resources made available to help Member States cater for needs of Ukrainians fleeing the war.
The Ukraine Facility will provide up to €50 billion in grants and loans for the period 2024-2027 to support Ukraine’s efforts to sustain macro-financial stability, promote short-term recovery as well as rebuild and modernise the country whilst implementing key reforms on its EU accession track. It will support the transition towards green, digital and inclusive economy that is progressively aligned with EU rules and standards. Out of this, €6 billion has already been disbursed in exceptional bridge financing and an additional €1.9 billion in pre-financing under the Facility is expected to be disbursed later in June.
At the heart of the Ukraine Facility is the Ukraine Plan, developed by the Government of Ukraine and positively assessed by the Council on 14 May. The document sets out reforms and investments that can boost sustainable economic growth and attract investments, amplifying the country’s growth potential in the medium-to-long term.
As part of the Ukraine Facility, a Ukraine Investment Framework to attract public and private investments with €7.8 billion in loan guarantees and €1.51 billion for blended finance grants has been established. The Ukraine Investment Framework is expected to mobilise up to €40 billion in public and private investments over the next years.
For More Information
Webpage of the Ukraine Recovery Conference 2024
Factsheet on Ukraine Investment Framework
Webpage on EU support for Ukraine
Multi-agency Donor Coordination Platform for Ukraine
Quote(s)
The European Union is rallying financial firepower to help Ukraine resist and recover. From the proceeds of immobilized Russian assets, to our €50 billion Ukraine Facility, we will make sure Ukraine has all the support it needs. Today, we are kicking off our investment plan under the Facility, signing the first agreements worth €1.4 billion with our partner banks to attract further private sector investments. The business community wants to step up its contribution. And together, we will help Ukraine resist and recover.
Ursula von der Leyen, President of the European Commission