On Monday, March 18, the Cabinet of Ministers of Ukraine approved the Plan for the Ukraine Facility, which will serve as the basis for implementing the financial support programme for Ukraine from the European Union for the period 2024-2027.
After approval by the Cabinet of Ministers of Ukraine, the text of the Plan for the Ukraine Facility will be submitted for assessment to the European Commission and approval by the committee of EU member states, after which the Ukraine Facility programme will finally come into effect.
The Plan for the Ukraine Facility envisages the implementation of structural reforms in the public sector, a series of economic reforms aimed at developing the business climate and entrepreneurship, as well as steps to develop 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 approval of the Plan for the Ukraine Facility by the Government is a critically important step for the final launch of the programme. The principles laid down in this document together with our partners will serve as the foundation for the implementation of a whole range of reforms and will contribute to dynamic development. I would like to note that the Plan for the Ukraine Facility is not a comprehensive state development strategy, but the implementation of the indicators laid down in it will significantly strengthen the resilience of the national economy," said First Deputy Prime Minister - Minister of Economy of Ukraine Yulia Svyrydenko.
Overall, the Plan for the Ukraine Facility includes over 150 indicators across 69 reform directions, scheduled for implementation by 2027. The plan was developed in full synchronization with Ukraine's key international partners. Accordingly, the indicators provided for in the Plan partially correspond to Ukraine's existing international obligations under other agreements.
The Plan for the Ukraine Facility also includes 16 investment indicators as part of the overall list of changes. To achieve them, it is necessary to continue and strengthen programmes for infrastructure development, demining, renewable energy, support for small and medium-sized enterprises, and more.
The funding under the Ukraine Facility programme depends directly on the implementation of the indicators outlined in the Plan for the Ukraine Facility. In 2024, it is planned to implement over 36 indicators in the areas of improved public finance management, combating corruption, state property management, human capital development, improving the business environment, and developing priority sectors.
It is expected that the last payment under the programme's terms will be made in 2028 based on the results of the implementation of the indicators for the fourth quarter of 2027.
During the period leading up to the final launch of the Ukraine Facility programme, a mechanism for transitional financing in the amount of 6 billion euros is provided.
Under the agreements on transitional financing, Ukraine will implement 5 indicators in the areas of public finance management, combating corruption, business environment development, and land market functioning. Three of them have already been implemented, and two necessary steps for receiving transitional financing are under development.
It is planned that the first payment under the agreements on transitional financing in the amount of 4.5 billion euros will be received in March 2024. The remaining amount of this sum - 1.5 billion euros - Ukraine will be able to receive in April 2024 after the European Commission assesses the implemented indicators.
It should be noted that in February 2024, the European Parliament approved the regulation of the Ukraine Facility programme. According to the approved regulation, the EU's support programme for Ukraine in the amount of 50 billion euros will be in effect from 2024 to 2027 and will include three components:
- Direct support for the state budget - 38.27 billion euros, of which 33 billion euros in the form of loans and 5.27 billion euros in the form of grants;
- Special investment instrument to cover risks in priority sectors - 6.97 billion euros;
- Technical support for reform implementation and interest coverage for loans, including those received earlier - 4.76 billion euros.
The preparation of the Plan for the Ukraine Facility was carried out under the leadership of First Deputy Prime Minister - Minister of Economy of Ukraine Yulia Sviridenko and the team of the Ministry of Economy of Ukraine in cooperation with other ministries and relevant government agencies, as well as in constant consultation with representatives of the European Commission.
Representatives of business, civil society organizations, parliament, and regional representatives were actively involved in the creation 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 on behalf of the government of the United Kingdom. In total, the Plan partially or fully took into account 133 proposals from business representatives and 84 from civil society organizations.
It should be noted that the Plan for the implementation of the Ukraine Facility is only 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 impact on the growth of the national economy.
