Ukraine signed a €27B loan agreement with the EU under the Ukraine Facility program.

Ukraine and the European Commission have signed a credit agreement within the Ukraine Facility program, which will provide €27B in loans from 2024-2027 to finance the state budget deficit. The National Bank clarified that immediately after this agreement is finalized Ukraine will receive €1.9B in pre-financing from the EU.

As a reminder, the Ukraine Facility tool includes three key components:

1. direct support for the state budget (€38.27B, of which €33B is in the form of loans and €5.27B in the form of grants)
2. a special investment instrument to cover risks in priority sectors (€6.97B)
3. technical support in implementing reforms and loan interest coverage, including previously received loans (€4.76B)

Tranches will be received once a quarter based on Ukraine’s implementation of the indicators from the Ukraine Plan and the EU’s positive assessment. Approximately €16B in budget support through the program is expected this year.