European Parliament approves creation of EUR 50B Ukraine Facility in EU budget

At a plenary meeting in Strasbourg, the European Parliament has approved the creation of the Ukraine Facility worth EUR 50 billion in the EU budget for 2024-2027, as delivered by the Members of the European Parliament, Michael Gahler and Eider Gardiazabal Rubial, and the proposals of the Council of the EU in this regard.

The relevant decision was made with 536 votes in favor, 40 against and 39 abstentions, an Ukrinform correspondent reports.

The Ukraine Facility is intended to help Ukraine overcome social, economic and environmental consequences of Russian armed aggression, promote Ukraine’s reconstruction, recovery and modernization, as well as the implementation of necessary reforms for the state to gain membership in the EU.

The Ukraine Facility’s main objective includes assistance in maintaining the country’s macro-financial stability and alleviating Ukraine’s external and internal financial difficulties; reconstruction and modernization of war-damaged infrastructure, namely energy infrastructure, water supply systems, internal and cross-border transport networks, including railways, roads, bridges, border crossing points.

Separately, the document provides for social aid, namely to internally displaced persons, war veterans and the most vulnerable social groups, and to rebuild the housing fund destroyed during hostilities.

The measures provided in the Ukraine Plan, which should be prepared by Ukraine, will be implemented using the Ukraine Facility and should include an accelerated transition to sustainable and inclusive economy for Ukraine’s further integration into the EU’s single market and the key reforms, in particular those related to the judicial system, democracy and rule of law, the fight against corruption and crime.

Support from the Ukraine Facility shall be additional to the support provided under other EU programmes and instruments. Activities eligible for funding under this Regulation may receive support from other EU programmes and instruments provided that such support does not cover the same costs.

The Ukraine Facility should not support activities or measures which promote investments in fossil fuels, or that do not respect the principle of ‘do no significant harm’, including to biodiversity or the climate.

The Ukraine Facility should contribute to adherence to the United Nations Framework Convention on Climate Change and the Paris Agreement adopted under that Convention, and should not contribute to environmental degradation or cause harm to the environment or climate.

The support under the Facility should be made available under the precondition that Ukraine continues to respect effective democratic mechanisms and institutions, including a multi-party parliamentary system and the rule of law, and to guarantee respect for human rights, including the rights of persons belonging to minorities.

The European Commission and the Member States will ensure the coherence, consistency, complementarity and transparency of their support, in particular through regular consultations and frequent exchanges of information during the different phases of the support cycle with relevant stakeholders, including at local and regional level.

The financial support for Ukraine under the Ukraine Facility in the form of loans will be available for the period from January 1, 2024 to December 31, 2027. The loans shall have maximum duration of 35 years.

Separately, the regulatory rules regarding the use of the Ukraine Facility define the EU’s efforts to create favorable conditions for the inflow of foreign investment in Ukraine and the mitigation of risks connected with Russian armed aggression against Ukraine.