The EU has signed the first guarantee agreements worth EUR 1.4 billion under the investment component of the Ukraine Facility programme

The European Union has signed the first guarantee agreements worth EUR 1.4 billion under the investment component of the Ukraine Facility programme. Thus, the EU has launched the Ukraine Investment Framework, which will help accelerate Ukraine's recovery, in particular its energy infrastructure.

This was announced by Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine, during the Ukraine Recovery Conference-2024 in Berlin.

"The EU's financial assistance is one of the factors that has helped our economy to show recovery growth in the midst of war. After a record drop of almost 30%, last year we already had a GDP of +5.3%. For growth to continue, we need to quickly rebuild the destroyed infrastructure, including the energy infrastructure that has been mercilessly demolished by the enemy in recent months, but most importantly, we need to attract private sector investment and help businesses operate and develop. The first agreements worth EUR 1.4 billion signed with international and bilateral financial institutions under the Ukraine Investment Framework, the investment component of the Ukraine Facility programme, will contribute to this. Now this investment instrument will start working, and new investors will enter Ukraine," Yuliia Svyrydenko said.

The First Deputy Prime Minister also thanked the European partners for their unwavering support and assistance to Ukraine to help it recover and rebuild.

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.”

The new agreements consist of EUR 1 billion in loan guarantees and EUR 400 million in blended financial grants. They will benefit private companies, including small and medium-sized enterprises, municipalities and Ukrainian state-owned enterprises, and will focus on the repair, reconstruction and development of energy infrastructure. Other programmes are aimed at the transport and municipal sectors, and access to finance for small and medium-sized enterprises, including those affected by the war in the de-occupied and frontline regions.

The full list of programmes aimed at unlocking EUR 6 billion of investment 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 to support 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.

To further support Ukraine's reform efforts on its path to the EU, the European Commission also signed new technical assistance programmes worth over EUR 100 million at the Berlin conference to help advance Ukraine's reforms in areas such as decentralisation, education and skills, healthcare, integrated border management and crisis response.

Ukraine and the EU signed an agreement to cancel Ukraine's financial obligations related to its participation in EU programmes, which will apply to all payments from 1 January 2021, saving money for the Ukrainian state budget.

IC UAC according to the MEU [2] and DG NEAR [3]