EU unveils EUR 2.3 billion financial plan for Ukraine's restoration

The European Commission has announced a new €2.3 billion package of agreements aimed at supporting Ukraine's recovery and reconstruction. This announcement was made at the Ukraine Recovery Conference in Rome.

The package includes several key components. The EU Commission is disbursing €1 billion today under the sixth instalment of the EU's €18.1 billion Macro-Financial Assistance (MFA) package to Ukraine, bringing the total lending to €8 billion since the start of the year. This funding will help Ukraine tackle its economic challenges and continue its recovery.

In addition, the Commission is proposing a fourth disbursement under Pillar I of the Ukraine Facility, expected in August, worth up to €3.05 billion. This disbursement includes €1.8 billion in loan guarantees and €580 million in grants. The Commission expects this package to mobilize up to €10 billion in investments in Ukraine.

One of the main focuses of the package is rebuilding cities and communities. €520 million has been allocated for municipal infrastructure in war-affected areas, including healthcare, urban mobility, and housing. Critical infrastructure repair and rebuilding also receive attention, with €310 million set aside for repair and rebuilding of critical infrastructure, including housing, hospitals, and medical facilities.

Energy security and green transition is another important aspect of the package. €265 million will be used to stabilize Ukraine's energy grid, rebuild renewable energy capacity, and improve energy efficiency.

The package also includes support for Ukraine's small businesses. €500 million in guarantees and grants will be made available for Ukraine's small businesses, including start-ups and those employing veterans and displaced persons.

Mobilizing strategic investments is another key component of the package. €600 million will be used for large-scale private sector projects in key sectors like energy, transport, and manufacturing.

The largest equity fund in Ukraine, the European Flagship Fund for the Reconstruction of Ukraine, has an initial capital of €220 million. This fund aims to mobilize €500 million by 2026 and further fundraising is foreseen as security conditions improve. Besides the European Commission, the countries involved in financing the new European flagship fund for Ukraine's reconstruction include Liechtenstein and Switzerland, showing clear determination for Ukraine's rebuilding efforts. However, the specific full list of countries was not detailed in the search results.

In conclusion, the EU Commission's new package of agreements for Ukraine's recovery and reconstruction includes funding for economic recovery, rebuilding cities and communities, energy security and green transition, critical infrastructure repair and rebuilding, and support for small businesses. The package is expected to mobilize up to €10 billion in investments in Ukraine and is a significant step forward in Ukraine's recovery and rebuilding efforts.