On Monday, 18 March, the Cabinet of Ministers of Ukraine approved the Ukraine Facility Plan, which will become the basis for the implementation of the EU’s financial support programme for Ukraine in 2024-2027.

Following the approval of the Plan by the Cabinet of Ministers of Ukraine, its text will be sent to the European Commission for evaluation and approval by the Committee of EU Member States, after which the Ukraine Facility programme will finally enter into force.

The Ukraine Facility Plan 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.

“The Government’s approval of the Ukraine Facility Plan is a critical step for the final launch of the programme. The principles that we have laid down in this document together with our partners will form the basis for implementing a number of reforms and will contribute to dynamic development. I would like to point out that the Ukraine Facility Plan is not a comprehensive national development strategy, but the implementation of the indicators set out in it will help to significantly strengthen the sustainability of the national economy,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

In total, the Ukraine Facility Plan includes more than 150 indicators in 69 reform areas to be implemented by 2027. The Plan was developed in full synchronisation with Ukraine’s key international partners. In this regard, the indicators provided for in the Plan partially correspond to Ukraine’s existing international commitments under other agreements.

The Ukraine Facility Plan also includes 16 investment indicators, which are included in the general list of changes. In order to meet them, it is necessary to continue and strengthen programmes for infrastructure development, demining, renewable energy, support for small and medium-sized enterprises, etc.

Funding under the Ukraine Facility programme is directly dependent on the achievement of the indicators set out in the Ukraine Facility Plan. In 2024, more than 36 indicators are planned to be implemented in the areas of improving public financial management, fighting corruption, managing state property, developing human capital, improving the business environment and developing priority sectors.

The last instalment under the programme is expected to be disbursed in 2028 based on the performance of the indicators for the fourth quarter of 2027.

A EUR 6 billion transitional financing mechanism is envisaged for the period until the final launch of the Ukraine Facility programme.

As part of the transitional financing arrangements, Ukraine is implementing 5 indicators in the areas of public financial management, anti-corruption, business environment development and land market functioning. Three of them have already been implemented, and two more steps required to receive transitional funding are being developed.

The first instalment of EUR 4.5 billion under transitional financing arrangements is expected to be received in March 2024. Ukraine will be able to receive the rest of this amount – EUR 1.5 billion – in April 2024 after the European Commission assesses the fulfilment of the indicators.

As a reminder, in February 2024, the European Parliament approved the Ukraine Facility programme regulations. According to the approved regulations, the EU’s EUR 50 billion support programme for Ukraine will run from 2024 to 2027 and will include three pillars:

• The first pillar 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 pillar is a special investment instrument to cover risks in priority sectors – EUR 6.97 billion;
• The third pillar is technical support for reforms and interest coverage on loans, including those received earlier – EUR 4.76 billion.

The preparation of the Ukraine Facility Plan was led by Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine, and the team of the Ministry of Economy, in cooperation with other ministries and relevant government agencies, as well as in constant consultation with representatives of the European Commission.

Representatives of the business community, NGOs, the Parliament, and representatives of the regions were also actively involved in the development of the Plan. The Kyiv School of Economics provided analytical and organisational support in the development of the document with the support of UK International Development from the UK government. In total, the Plan partially or fully took into account 133 proposals from business representatives and 84 from NGOs.

It should be noted that the Ukraine Facility Plan is only one part of the Government’s plans and measures for the development and recovery of Ukraine. The main focus of the Plan is on the development of sectors and industries that can have the greatest positive impact on the growth of the national economy.