EUR 1.4bn EU guarantee and grant agreements to support Ukraine recovery
Ukraine recovery - Photo © European Union 2024
(BERLIN) - European Commission president Ursula von der Leyen announced the signature Tuesday of EUR 1.4 billion in new guarantee and grant agreements to support Ukraine's recovery and reconstruction.
Speaking at the 'Ukraine Recovery Conference 2024', she said: "The European Union is rallying financial firepower to help Ukraine resist and recover. From the proceeds of immobilized Russian assets, to our €50 billion Ukraine Facility, we will make sure Ukraine has all the support it needs."
These are the first agreements signed with international and bilateral public financial institutions under the Ukraine Investment Framework, the investment arm of the EU's up to €50 billion Ukraine Facility to support Ukraine in the face of Russia's ongoing war of aggression and on its path towards EU membership.
The agreements, comprised of €1 billion of loan guarantees and €400 million of blended finance grants, will benefit private companies, including small and medium-sized enterprises, municipalities and Ukrainian state-owned enterprises. They will focus on the repair, rehabilitation and development of energy infrastructure, which has been heavily targeted by Russia in recent months. Other programmes target the transport and municipal sectors, and access to finance for small and medium-sized enterprises, notably to businesses affected by the war in de-occupied and front-line regions.
The full list of programmes, which aim to unlock €6 billion in investments, includes:
- Initiatives in Support of Ukraine's Private Sector – to enhance access to finance for small and medium-sized enterprises, including to war-affected companies. The EU is providing €190 million in guarantees and €10 million investment grants via the European Investment Bank (EIB) Group;
- Better Futures Programme, Resilience, Reconstruction, and Regeneration of Ukraine – to accelerate and scale-up investments in renewable energy such as wind power projects, battery energy storage systems, transport, digital sector, and industrial investments. including steel production, construction materials and processing. The EU will provide €350 million in guarantees and €17.5 million in technical assistance via the International Finance Corporation (IFC).
- Financial Inclusion Recovery Programme – to enhance access to finance for small and medium-sized enterprises and invest in their production capacity. The EU is providing €140 million in guarantees, €30 million in investment grants and €7 million in technical assistance via the European Bank for Reconstruction and Development (EBRD).
- Hi-Bar Programme – to mobilise finance to accelerate the net zero transition in the energy sector. The EU is providing €150 million in guarantees and €7.5 million in technical assistance via the EBRD.
- Municipal, Infrastructure and Industrial Resilience Programme – focused on emergency support and future reconstruction efforts across sectors, including industry, energy, municipal infrastructure. The EU is providing €150 million in guarantees, €25 million in investment grants, and €7.5 million in technical assistance via the EBRD.
- Promoting Green Lending via the Green for Growth Fund – to enhance access to financing for mid-caps and small and medium-sized enterprises, green and circular economy businesses, climate adaptation, energy efficiency and green transition. The EU is providing first loss capital of €45 million, €7 million in investment grants and €3 million in technical assistance via the Kreditanstalt für Wiederaufbau (KfW), the German Development bank.
- EU4Business, Lending to Micro and Small Enterprises via the EFSE Fund – to support the restoration and relocation of war-affected companies, micro and early-stage entrepreneurship, businesses in de-occupied/front-line regions, and the adaption of agricultural business. The EU is providing first loss capital of €45 million, €9 million in investment grants and €1 million in technical assistance via the KfW.
- Reconstruction and Rehabilitation of Electricity Transmission Infrastructure Programme – to strengthen the resilience of electricity transmission by investing in sustainable repairs and rehabilitation of electricity infrastructure as well as restoring access to electricity supply for critical infrastructures. The EU will provide €100 million investment grants via the KfW.
- Support for Ukrainian MSMEs Programme – to enhance access to finance for micro, small and medium-sized enterprises focusing on war-affected companies to help them to restore their business, including in de-occupied and front-line regions. The EU is providing €20 million in guarantees via Bank Gospodarstwa Krajowego (BGK).
- Municipal Infrastructure Development Programme to support water and sanitation investments, rehabilitation of water supply and sewage infrastructure in the City of Chernivtsi. The EU is providing €17.75 million in investment grants and €2 million in technical assistance via the KfW.
- Immediate Ukraine Extension of JASPERS (Joint Assistance to Support Projects in European Regions) – to provide capacity-building to prepare and implement large-scale infrastructure projects and advisory services for the Ukraine's reconstruction. The EU is providing €10 million in technical assistance via the EIB.
Ukraine Recovery and Reconstruction Guarantee Facility - to provide war insurance for movable assets, such as in-land cargo transport. The EU is providing €50 million in guarantees via the EBRD to cover the risk of a fund which will in turn extend insurance coverage. Other donors will provide an additional €60 million in guarantee commitments.
Webpage of the Ukraine Recovery Conference 2024
Factsheet on Ukraine Investment Framework
Webpage on EU support for Ukraine