On Thursday, July 13, Minister of Finance of Ukraine Sergii Marchenko met with Special Envoy of the President of France for assistance and reconstruction of Ukraine Pierre Heilbronn.
Deputy Minister of Finance of Ukraine Olga Zykova and Government Commissioner for Public Debt Management Yuriy Butsa also took part in the meeting.
The parties discussed the mechanism of the Multi-Agency Donor Coordination Platform for Ukraine, the needs for rapid recovery, as well as the preparation and implementation of the Ukraine Facility from the EU.
“First of all, I would like to express my gratitude to the Government of France for its intention to provide Ukraine with an additional 40 million euros to finance the reconstruction of critical infrastructure and healthcare needs. Also, last month our countries signed an Agreement on the suspension of public debt payments – this will reduce the debt burden on the State Budget of Ukraine, as well as support the economy during the war and allow us to direct funds to finance priority needs,” said Sergii Marchenko.
During the discussion of the Multi-Agency Donor Coordination Platform for Ukraine, the Minister of Finance noted that during the first months of 2023, main efforts were directed towards ensuring predictable and rhythmic budget support, as well as funding for the recovery of Ukraine. Thanks to these efforts, Ukraine was able to mobilize the necessary international support to ensure macro-financial stability this year:
“Overall, we have commitments from donors for almost USD 42.5 billion of macro-finance support in 2023 to finance the deficit of the State Budget of Ukraine. Thanks to the coordinated work of the Government of Ukraine with international partners, the current work of the Platform is focused on further detailing the priority recovery needs, the current status of disbursements and the capacity to implement projects in the early reconstruction phase.”
Sergii Marchenko said that there is a certain discrepancy between the projects that partners want to invest in and our needs. That is why the Ukrainian side and international donors are currently coordinating the list of urgent recovery projects and available resources.
Of all the financial commitments of the partners for the recovery of Ukraine, only USD 3.87 billion meet the needs of rapid recovery, which is estimated at USD 14.1 billion. At the same time, the Minister of Finance emphasized that rapid recovery is a key priority, as it contributes to the creation of safe living conditions for Ukrainians, as well as the country’s economic recovery.
Funding raised in the amount of USD 3.87 billion is distributed according to priority sectors, namely: energy support – USD 837 million, humanitarian demining – USD 169 million, housing – USD 25 million, private sector – USD 206 million, and critical infrastructure recovery – USD 2.6 billion.
The Minister of Finance also emphasized that during the Ukraine Recovery Conference (URC-2023), which took place at the end of June in London, EU leaders announced the creation of a Ukraine Facility. This instrument will be part of the multiannual financial program of the EU for 2024-2027. The Ukraine Facility will focus on supporting Ukraine’s macro-financial stability, promoting recovery, reconstruction and modernization, as well as facilitating the transition to a green, digital and inclusive economy.
Sergii Marchenko noted that the Ukraine Facility will contain three main components: financial support in the form of non-refundable and credit support for Ukraine; an investment framework designed to attract private and public investments; technical assistance and support measures, including expert assistance on reform issues.
“In order to implement the Ukraine Facility mechanism, the Government of Ukraine must develop a Plan for recovery, reconstruction and modernization. This Plan will serve as a reference point for other donor assistance programs for Ukraine,” said Minister of Finance of Ukraine Sergii Marchenko.