Government approves reform plan for Ukraine Facility shutterstock

Government approves reform plan for Ukraine Facility

Katerina Belousova

Implementation of the plan will allow to receive €16 billion in 2024

On Monday, March 18, the Cabinet of Ministers approved the Reform Plan for the €50 billion Ukraine Facility, a European support program for Ukraine, with green transition as one of its cross-cutting areas.

This funding is designed for four years, according to Ukrainian Prime Minister Denys Shmyhal on Telegram.

He said that the Plan contains structural reforms with more than 100 quarterly indicators.

"These are European approaches to public administration reform, the fight against corruption, economic and sectoral reforms in various areas, from energy to agriculture. In addition, the document sets out cross-cutting areas such as green transition, digitalization, and European integration," Shmyhal emphasized.

He added that the plan was developed jointly with European partners to strengthen Ukraine and bring it closer to EU membership, as well as to ensure sustainable economic development. Thanks to its implementation, Ukraine will be able to receive about €16 billion in 2024.

The government 's press service explained that after the text of the Plan is approved, it will be sent to the European Commission for evaluation and approval by a committee of EU member states. After that, the Ukraine Facility program will finally come into force.

It is noted that the Plan provides for:

  • structural reforms in the public sector;
  • a number of economic reforms aimed at developing the business climate and entrepreneurship;
  • steps to develop priority sectors that can ensure rapid economic growth.

The press service emphasized that the Plan contains more than 150 indicators in 69 areas of reform, which are scheduled to be implemented by 2027. Some indicators partially correspond to Ukraine's existing international commitments.

The Ukraine Facility Plan also includes 16 investment indicators. In order to fulfill them, it is necessary to continue and strengthen the programs on:

  • infrastructure development;
  • demining;
  • renewable energy;
  • support for small and medium-sized enterprises, etc.

It is noted that transitional funding of €6 billion is provided until the final launch of the Ukraine Facility program. This funding has 5 indicators, three of which have already been implemented and two are being developed.

It is expected that €4.5 billion of this amount will be disbursed in March, and the rest in April after the European Commission assesses the implementation of the indicators.

The report added that the Ukraine Facility program has three components:

  • direct support from the state budget – €38.27 billion, including €33 billion in loans and €5.27 billion in grants;
  • a special investment instrument to cover risks in priority sectors – €6.97 billion;
  • technical support in implementing reforms, as well as covering interest on loans, including those received earlier – €4.76 billion.

Earlier, EcoPolitic wrote, that Olha Boyko, Coordinator of the EBA Industrial Ecology and Sustainable Development Committee, warned that the launch of the Ukraine Facility would replace some other support programs, which may result in Ukraine not receiving about €4.4 billion in potential and available funding from the EU for green transformation by 2027.

As EcoPolitic previously reported, in February, the European Parliament supported the Regulation on the launch of the Ukraine Facility, a €50 billion support program for Ukraine, which, among other things, includes climate and environmental goals.

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