On Monday, March 18, the Cabinet of Ministers of Ukraine approved the Ukraine Facility Plan, which will form the basis for the implementation of the EU’s financial support program for Ukraine in 2024-2027.

After approval by the Cabinet of Ministers of Ukraine, the text of the Ukraine Facility Plan will be forwarded to the European Commission for evaluation and approval by the committee of the EU Member States, whereupon the Ukraine Facility program will finally enter into force.

The Ukraine Facility Plan provides for the implementation of structural reforms in the public sector, a number of economic reforms aimed at the development of business climate and entrepreneurship, as well as steps for the development of priority sectors that can ensure rapid economic growth. The implementation of the Plan will contribute to Ukraine’s European integration and further sustainable economic development.

“The Government’s approval of the Ukraine Facility Plan is a critically important step for final launch of the program. The principles that we have laid down in this document together with our partners will form the basis for the implementation of a number of reforms and will contribute to dynamic development. I would like to emphasize that the Ukraine Facility Plan is not a comprehensive national development strategy, but the implementation of indicators set out therein will help to significantly strengthen the sustainability of the national economy,” said Yuliia Svyrydenko, First Deputy Prime Minister of Ukraine and Minister of Economy of Ukraine.

In total, the Ukraine Facility Plan includes more than 150 indicators in 69 reform areas to be implemented by 2027. The plan was developed in full synchronization with Ukraine’s key international partners. In this regard, the indicators envisaged in the Plan partially correspond to Ukraine’s existing international commitments under other agreements.

The Ukraine Facility Plan also includes 16 investment indicators that are included in the general list of changes. To fulfill them, it is necessary to continue and strengthen programs for infrastructure development, demining, renewable energy, support for small and medium-sized enterprises, etc.

Funding under the Ukraine Facility program directly depends on the fulfillment of indicators set out in the Ukraine Facility Plan. In 2024, more than 36 indicators are expected to be implemented in the areas of improvement of public finance management, fighting against corruption, management of state property, development of human capital, improvement of business environment, and development of priority sectors.

It is expected that the last payment under the program will be forwarded in 2028 based on the results of indicators for the fourth quarter of 2027.

A €6 billion transitional financing mechanism is envisaged for the period until final launch of the Ukraine Facility program.

As part of transitional financing agreements, Ukraine is implementing 5 indicators in the areas of public finance management, fighting against corruption, development of business environment, and functioning of land market. Three of them have already been implemented, and two more steps required to receive transitional funding are under development.

The first payment under the transitional funding agreements in the amount of EUR 4.5 billion is expected to be received in March 2024. The rest of this amount – EUR 1.5 billion – will be received by Ukraine in April 2024 after the European Commission evaluates the fulfillment of indicators.

Let’s remind that in February 2024, the European Parliament approved the Regulation on the Ukraine Facility program. According to the approved regulation, the EU’s EUR 50 billion support program for Ukraine will run from 2024 to 2027 and will include the following three components:

• The first component is direct support to the state budget – EUR 38.27 billion, including EUR 33 billion in loans and EUR 5.27 billion in grants;
• The second component is a special investment instrument to cover risks in priority sectors – EUR 6.97 billion;
• The third component is technical support for the implementation of reforms, as well as interest coverage on loans, including those received earlier – EUR 4.76 billion.

The preparation of the Ukraine Facility Plan was led by Yuliia Svyrydenko, the First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine and the team of the Ministry of Economy of Ukraine in cooperation with other ministries and relevant government agencies, as well as in constant consultations with representatives of the European Commission.

Representatives of business, civil society organizations, the Parliament, and representatives of the regions were also actively involved in the development of the Plan. The Kyiv School of Economics provided analytical and organizational support in the development of the document with the support of UK International Development from the UK Government. In total, the Plan partially or fully took into account 133 proposals from business representatives and 84 from public organizations.

It should be noted that the Plan for the implementation of the Ukraine Facility is only a part of the Government’s plans and measures for the development and recovery of Ukraine. The main focus of the Plan is on the development of sectors and industries that can have the greatest positive effect on the growth of the national economy.