Commission paves the way for release of the second regular payment to Ukraine

The Commission has given a positive assessment for the second regular payment of close to €4.1 billion under the EU's Ukraine Facility, to support Ukraine's macro-financial stability and the functioning of its public administration.

Once adopted by the Council, this decision will bring to €16.1 billion the total funds disbursed in 2024 in support of the Ukraine Plan.

Following the assessment of the second payment request submitted by Ukraine in October, the Commission has concluded that Ukraine has satisfactorily fulfilled the nine agreed reform indicators for this payment. These reforms cover areas such the fight against corruption, business environment, labour market, regional policy, energy market and environmental protection.

European Commission President Ursula von der Leyen said: “Today's positive assessment by the Commission of Ukraine's €4.1 billion payment request is further proof both of Europe's steadfast commitment to Ukraine, and of the country's impressive progress in driving forward important reforms to advance on its EU path while fighting an atrocious war.”

Accomplished steps for this payment request include:

• Increased capacity to fight corruption: Ukraine has increased the staff of the Specialised Anti-Corruption Prosecutor's Office (SAPO), as well as amended the Criminal Code and the Criminal Procedure Code to increase the efficiency of fighting corruption. In particular, the legal framework of plea bargaining was significantly improved.
•  Improved asset recovery: Ukraine has adopted an Action Plan for the implementation of the Asset Recovery Strategy for 2023-2025. It outlines a number of measures in line with international best practice, such as reforming the legal confiscation mechanism, asset return, tracing and identification.
• Improved regulatory environment:  Ukraine has adopted an Action Plan to ease the burden on businesses by reviewing and removing overlapping regulations, deregulating economic activities and digitising administrative procedures.
• Updated State Strategy for 2021-2027 Regional Development: The aim of the revised Strategy is to strengthen social cohesion and improve the well-being and security of Ukrainians through a more democratic, decentralised, and inclusive multi-level governance system.
• Electricity market reform: Secondary legislation on wholesale market integrity and transparency has entered into force.
• New law on prevention, reduction and control of industrial pollution: This law represents a first step to transpose relevant EU acquis and fight industrial pollution.

Next Steps

The Commission has submitted to the Council its assessment of Ukraine's satisfactory fulfilment of the qualitative and quantitative indicators set out in the Ukraine Plan, together with a proposal for a Council Implementing Decision for the payment of close to €4.1 billion. The transfer to Ukraine will take place following the adoption of this Decision by the Council, and the adoption of a payment decision by the Commission.

Background

The EU's €50 billion Ukraine Facility, provided in grants and loans for the period 2024-2027, supports Ukraine's efforts to sustain macro-financial stability, promote short-term recovery as well as rebuild and modernise the country whilst implementing key structural reforms to advance on its EU path. So far, €15.6 billion have been mobilised across the three pillars of the Ukraine Facility, of which €12.06 billion have been already disbursed to Ukraine in light of progress in the implementation of the Ukraine Plan.

Regular quarterly payments under the Ukraine Facility ensure predictable financial assistance but are conditional on Ukraine meeting pre-agreed requirements outlined in the Ukraine Plan.

The Ukraine Plan – Ukraine's strategy for modernisation, recovery and reconstruction – covers reforms in the areas of energy, agriculture, transport, the green and digital transition, human capital, as well as state-owned enterprises, the business environment, public finances, and decentralisation.

Ukraine must submit a duly justified request for payment every quarter. The Commission then assesses whether Ukraine has achieved satisfactory fulfilment of the conditions agreed in the Plan, which are broken down in qualitative and quantitative steps.

In addition to the Ukraine Facility, the Commission has proposed to mobilise another €18 billion in support for Ukraine through an exceptional Macro-Financial Assistance loan under the Ukraine Loan Cooperation Mechanism, by leveraging extraordinary profits from immobilised Russian assets.