EU approves first €4.2bn payment to Kiev

The funds are part of a €50 billion Ukraine funding project

The European Council ambassadors have voted in favor of sending the first installment of the €50 billion plan to finance Ukraine through 2027.

Known as the Ukraine Facility, the program was set up last summer, with the goal of providing “predictable financial support” to Kiev.

“Today, Ambassadors adopted the first installment under the Ukraine Plan of the Ukraine Facility Regulation, paving the way for the transfer of nearly €4.2 bn to support Ukraine’s recovery, reconstruction, and modernization,” the Hungarian presidency of the council announced on X (formerly Twitter). 

The council now needs to follow written procedure to actually disburse the funds.

According to the European Council, the Ukraine Facility was designed “as a flexible instrument adapted to the unprecedented challenges of supporting a country at war and ensuring predictability, transparency, and accountability of the funds.” 

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The EU eventually approved up to €50 billion for the project, starting this year and going through 2027, “for all types of support.” The money will be disbursed through grants, loans, investments and outright aid.

The plan was actually launched in March, with around €7.8 billion sent under “interim and preliminary” arrangements. Regular quarterly payments under the Ukraine Plan will depend on Kiev fulfilling the “pre-agreed requirements,” according to Brussels. 

Wednesday’s funding is separate from the program to lend Ukraine some €1.4 billion from the interest earned by sovereign Russian assets frozen in the EU since 2022. Moscow has accused Brussels of “theft” for freezing more than €200 billion ($217 billion) in Russian central bank assets following the start of the Ukraine conflict.

Legal concerns have stopped the EU from outright seizing the funds, but the bloc has submitted to US pressure to use the interest from them instead. The value of open-ended loans generated this way has been estimated at €3 billion ($3.25 billion) a year. The first installment, amounting to €1.4 billion ($1.5 billion), will be sent to Kiev in early August, EU foreign policy commissioner Josep Borrell has said.