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," said Yuliia Svyrydenko.
The First Deputy Prime Minister also thanked the European partners for their unwavering support and assistance to Ukraine to help it recover and rebuild.
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 to support Ukraine's private sector - expanding access to finance for small and medium-sized enterprises and providing urgent support to companies affected by the war. The EU provides EUR 190 million in guarantees and EUR 10 million in investment grants through the European Investment Bank (EIB).
- The Better Future Programme, Resilience, Recovery and Rebuilding Ukraine, - accelerating and expanding investment in renewable energy, including new wind energy projects, battery energy storage, transport, digital and the real sector, including steel production, construction materials and recycling. The EU is providing EUR 350 million in guarantees and EUR 17.5 million in technical assistance through the International Finance Corporation (IFC).
- The Financial Inclusion Recovery Programme aims to increase access to finance for small and medium-sized enterprises and to invest in their production capacity. The EU is providing EUR 140 million in guarantees, EUR 30 million in investment grants and EUR 7 million in technical assistance through the European Bank for Reconstruction and Development (EBRD).
- The Hi-Bar programme is aimed at removing barriers to mobilising the finance needed to accelerate the energy sector's transition to net-zero, which means reducing greenhouse gas emissions to the greatest extent possible, with any remaining emissions being absorbed from the atmosphere by other means such as oceans, forests, soils or artificial sinks. EU provides EUR 150 million in guarantees and EUR 7.5 million in technical assistance through the EBRD.
- Municipal, Infrastructure and Industrial Resilience Programme - addressing emergency support needs and future reconstruction efforts in various sectors, including industry, energy, municipal infrastructure. The EU is providing EUR 150 million in guarantees, EUR 25 million in investment grants and EUR 7.5 million in technical assistance through the EBRD.
- Promoting green lending through the Green for Growth Facility - expanding access to finance for mid-cap, small and medium-sized enterprises, green economy and circular economy enterprises and/or adaptation, energy efficiency and environmental transition. The EU is providing EUR 45 million in first loss capital, EUR 7 million in investment grants and EUR 3 million in technical assistance through KfW.
- EU4Business, Lending to Micro and Small Enterprises through the EFSE Facility - supporting the recovery and relocation of war-affected companies, micro and early-stage entrepreneurship, business recovery in the de-occupied and frontline regions and adaptation of agricultural businesses. The EU is providing EUR 45 million in first loss capital, EUR 9 million in investment grants and EUR 1 million in technical assistance through KfW.
- Electricity Transmission Infrastructure Reconstruction and Rehabilitation Programme - strengthening the resilience of electricity transmission by investing in the permanent repair and reconstruction of damaged or destroyed energy infrastructure, as well as restoring access to electricity for critical infrastructure. The EU is providing EUR 100 million in investment grants to be channelled through KfW.
- Support to Ukrainian MSMEs - to increase access to finance for micro, small and medium-sized enterprises, companies affected by the war, to help them rebuild their businesses, including in the de-occupied and frontline regions. The EU is providing EUR 20 million in guarantees through Bank Gospodarstwa Krajowego (BGK).
- The Municipal Infrastructure Development Programme, which supports the city of Chernivtsi in investing in water and sewerage, restoring water and sewerage infrastructure for local residents and a significant number of internally displaced persons. The EU is providing EUR 17.75 million in investment grants and EUR 2 million in technical assistance for lending through KfW.
- Immediate expansion of JASPERS (Joint Assistance for Support to Projects in the European Regions) in Ukraine - to provide capacity building for the preparation and implementation of large-scale infrastructure projects and advisory services to prioritise investments in sectors that are key to Ukraine's recovery. The EU is providing EUR 10 million in technical assistance through the EIB.
- Ukraine Recovery Guarantee Facility (URGF) - to attract risks transferred from the insurance industry, with an initial focus on providing military insurance for movable assets such as domestic freight transport. The EU is providing EUR 50 million in guarantees through the EBRD to cover the risks of the fund, which will in turn expand the insurance coverage. Other donors are providing an additional EUR 60 million in guarantee commitments.
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.