Ukraine signs loan agreement with EU for up to EUR 35B in macro-financial assistance

Ukrainian Finance Minister Sergii Marchenko, Governor of the National Bank of Ukraine Andriy Pyshnyy, and Vice-President of the European Commission Valdis Dombrovskis have signed a Memorandum of Understanding and a loan agreement with the European Union to secure up to EUR 35 billion in Macro-Financial Assistance (MFA).

This is according to the Ukrainian Finance Ministry, Ukrinform reports.

The funds are part of the G7's Extraordinary Revenue Acceleration Loans for Ukraine initiative.

The final amount of the MFA will be determined after all parties to the initiative approve the amount of loans. Taking into account the proposed financing of $20 billion by the United States, the EU's Macro-Financial Assistance could be in the amount of EUR 18 billion.

The loan will be repaid from future revenues from frozen Russian sovereign assets in the EU. Thus, it is expected that all MFA funds for Ukraine will be on a non-repayable basis. Domestic financial resources will not be used for repayment.

Funds will be provided under the new Ukraine Loan Cooperation Mechanism (ULCM), which will provide a non-repayable form of Macro-Financial Assistance.

The program includes 14 measures to attract MFA. The areas covered include macro-financial stability, state-owned enterprises, public administration, energy, rule of law and anti-corruption, and defense industry.

"The next important step is to raise funds from the frozen assets of the aggressor country. In recent months, we have been actively working with the European Union and other parties within the initiative to achieve concrete results in meeting Ukraine's financial needs in 2025 and beyond. I am grateful for the constructive cooperation and readiness to implement fair decisions in a short time," Marchenko said.