On Tuesday, February 27, the European Parliament supported the Regulation establishing the Ukraine Facility. The EU's EUR 50 billion support program for Ukraine will run from 2024 to 2027, of which EUR 38.27 billion will be allocated to support the state budget.

"Approval of the Ukraine Facility program will strengthen our macroeconomic stability and bring Ukraine closer to EU membership. The Regulation contains the final terms of the program, including the Ukraine Facility Plan, which will be approved by the Government in March and submitted to the European Commission for consideration. I am grateful to our European partners for their leadership and unwavering support of Ukraine," said Yuliia Svyrydenko, First Deputy Prime Minister of Ukraine and Minister of Economy of Ukraine.

The Regulation determines the areas, forms and procedure for providing financial support to Ukraine. Thus, the Ukraine Facility is divided into three key components:

• The first component is direct support to the state budget - EUR 38.27 billion, including EUR 33 billion in loans and EUR 5.27 billion in grants;
• The second component is a special investment instrument to cover risks in priority sectors - EUR 6.97 billion;
• The third component is technical support for the implementation of reforms, as well as interest coverage on loans, including those received earlier - EUR 4.76 billion.

In addition, the program provides for a transitional financing mechanism that will allow Ukraine to receive support for the state budget before the Ukraine Facility is fully launched. The Government is currently working with its European partners to conclude a memorandum, which is expected to be signed in March.

After the Plan takes into account the final requirements of the Ukraine Facility Regulation, the document will be endorsed by the Government and submitted to the European Commission. The final approval of the Plan by the EU is expected in April, thereby enabling the Ukraine Facility to become fully operational.

The basis for budgetary support under the program is the Ukraine Facility Plan, which envisages the implementation of structural reforms in the public sector, a number of economic reforms aimed at developing the business climate and entrepreneurship, as well as steps to develop priority sectors that can ensure rapid economic growth. The implementation of the Plan will contribute to Ukraine's European integration and further sustainable economic development. Budgetary support under the EU's Ukraine Facility will be provided on a quarterly basis for meeting the criteria set out in the Plan for the implementation of the reforms envisaged.

In accordance with the approved regulations, Ukraine has to refine the Plan, taking into account the following requirements:

• to enhance protection against cyber threats and resilience to disinformation and external interference;
• to strenghten measures to promote gender equality and empower women and girls;
• to increase the availability of social assistance for vulnerable groups, including veterans and IDPs;
• to counteract environmental crimes, including war-related damage, and ensure compliance with the principle of "do no significant harm" in relation to climate and environmental goals in wartime and post-war scenarios;
• to enhance cross-border cooperation with neighboring countries in the areas of trade, environmental protection, and crime prevention;
• to allocate 20% of the grant funds under the first component of the program (EUR 1.05 billion) to the needs of the regions for restoration and modernization.

The Plan is being prepared by the Government under the coordination of the Ministry of Economy of Ukraine in constant consultation with representatives of the European Commission, which ensured that the document met most of the requirements of the approved regulation at the preliminary preparation stage. In addition, representatives of business, civil society organizations, the Parliament, and representatives of the regions were actively involved in the development of the Plan. In particular, the Plan partially or fully took into account 133 proposals from business representatives and 84 from NGOs.

As a reminder, the Ukraine Facility Plan is a technical document required to implement the EU's financial support program for Ukraine. The Plan is not a general recovery strategy; it will cover only a part of the governmental changes envisaged for the coming years with a focus on macroeconomic growth.