Ukraine Facility

The Ukraine Facility is a pivotal instrument within the European Union's strategy to address the multifaceted challenges confronting Ukraine in the wake of Russia's war of aggression. This dedicated support mechanism, which entered into force on 1 March 2024 and covers the years 2024 to 2027, offers up to €50 billion in stable and predictable financial support. It represents a profound commitment by the EU to

• bolster Ukraine's resilience
• foster its recovery
• facilitate its path towards sustainable development and EU membership.

Aims of the Ukraine Facility

The key objectives of the Ukraine Facility are to:

• Support recovery, reconstruction, and modernisation –rebuild vital infrastructure, revitalise the economy, and enhance societal resilience.
• Support reforms on the way to EU accession – by providing assistance and incentives for reforms implementation, the EU aims to facilitate Ukraine's alignment with European standards and values.
• Support financing needs – ensuring the continuity of essential services even in the face of war and economic strain.
• Mobilise investments – facilitating investment flows to catalyse rapid economic recovery and sustainable growth, laying the groundwork for long-term prosperity.
• Support Ukrainian society –mitigating the humanitarian impact of the war and promoting social cohesion and inclusivity within Ukrainian society.

Structure of the Facility

Pillar I: Support to Ukraine through the Ukraine Plan

This pillar entails the provision of financial assistance to Ukraine, totalling €38.27 billion. Comprising both grants (€5.27 billion) and loans (€33 billion), this stream of support aims at addressing the financial needs of the Ukrainian State to maintain macro-financial stability while support reforms and investments aimed at the recovery, reconstruction and modernisation of Ukraine.

Funds under this Pillar of the Facility will be provided based on the successful implementation of the Ukraine Plan, with disbursements scheduled quarterly. The Commission made two regular payments under the Ukraine Facility in 2024, the first payment in August amounting to nearly €4.2 billion, and the second payment in December of €4.1 billion. The support is conditional upon fulfilment of requirements linked to

• essentials such as macro-financial stability, budget oversight, and public financial management
• sectoral and structural reforms and investments (necessary for the EU accession).

As part of the process of preparation of the Plan by the Ukrainian government, social partners, civil society organisations and the Ukrainian Parliament (the Verkhovna Rada) were consulted, in accordance with the principle of multi-level governance.

The Ukraine Plan was positively assessed by the Commission, and in May 2024 the Council adopted an implementing decision giving a positive assessment to the Ukraine Plan.

A precondition for the support to Ukraine under the Facility is that Ukraine continues to uphold and respect effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and to guarantee respect for human rights, including the rights of persons belonging to minorities.

An exceptional bridge financing for a total amount of € 6 billion was disbursed to Ukraine in March and April 2024, to support the urgent needs and ensure the macro-financial stability of the country. The payment was subject to the policy conditions agreed in a Memorandum of Understanding between the Commission and Ukraine.

The Commission will publish in early 2025 a scoreboard displaying the progress in the implementation of the Ukraine Plan.

Pillar II: Ukraine Investment Framework

Pillar II consists of a 'Ukraine investment framework', equipped with €9.3 billion (€7.8 billion in loan guarantees and €1.5 billion for blended finance grants), designed to attract and mobilise public and private investments for Ukraine's recovery and reconstruction, in support of the Ukraine Plan's implementation. It will cover risks for operations aiming at supporting sovereign, sub-sovereign, non-commercial and commercial entities, and the private sector: 

• loans, including local currency loans 
• guarantees 
• counter-guarantees
• capital market instruments any other form of funding or credit enhancement 
• insurance
• equity or quasi-equity participation

The EU signed the first guarantee agreements under the Facility’s Investment Framework to support Ukraine's recovery and reconstruction. The agreements, announced during the 2024 Ukraine Recovery Conference in Berlin, are comprised of €1.4 billion in guarantees and grants. 

At the end of September 2024, the Commission launched a new call for direct public and private investments and intermediated equity operations. Priority will be given to investments in the energy sector, as well as investments with high social impact, such as support to vulnerable groups, demining, and so on.  

Pillar III: Union accession assistance and related support measures

This pillar, amounting to €4.76 billion, focuses on providing technical assistance and support measures to facilitate Ukraine's alignment with EU laws and regulations. It includes:

• Capacity-building initiatives, including social partners, civil society organisations, as well as local and regional authorities.
• Assistance to Ukraine in implementing the reforms necessary for EU accession and to ensure the effective utilisation of financial assistance.
• Support for other initiatives aimed at responding to the Russian aggression against Ukraine, including to enforce international law in relation with crimes committed by Russia on the territory of Ukraine.
• Interest rate subsidies for the cost of loans provided by the Ukraine Facility or previous macro-financial assistance instrument. 

Protection of the EU’s financial interests 

The mission of the European Anti-Fraud Office (OLAF) is to detect, investigate and support the fight against fraud affecting the EU budget. In addition, OLAF is also competent to investigate suspicions of serious misconduct by Members of EU Institutions, EU staff and members and staff of other EU bodies, independently of whether they affect the EU budget or not.

To report fraud related to the Ukraine Facility which falls into the scope of OLAF, please use the following link.

Implementation and monitoring measures

• In May, the Commission signed a Framework Agreement with Ukraine for the implementation of the Facility setting out specific arrangements for the management, control, supervision, monitoring, evaluation, reporting and audit of funds under the Facility.
• Financing and loan agreements  set out the responsibilities and obligations of Ukraine and the EU in the implementation of Union funds, as well as the conditions for disbursements.   
• Ukraine Facility Dialogue – the Commission held the first dialogue with the European Parliament to discuss the progress in the implementation of the Facility on 3 December 2024.  These dialogues will take place at least every four months. 
• A Commission implementing decision was adopted in June 2024 on the establishment of a dedicated independent Audit Board composed of independent members appointed by the Commission.  The Audit Board will support the Commission by assessing the effectiveness of Ukraine's management and control systems, while conducting regular audit checks on the ground and liaising with Ukrainian authorities.
• Civil society and non-governmental organisations can transmit to the Commission opinions on the implementation of the Ukraine Facility by writing to ENEST-UKRAINE-FACILITY-PUBLIC-INPUTSec [dot] europa [dot] eu (ENEST-UKRAINE-FACILITY-PUBLIC-INPUTS[at]ec[dot]europa[dot]eu) 

Documents

For all the official documents related to the Ukraine Facility, please consult the Document repository