Finance Minister Serhiy Marchenko and Chairman of the National Bank of Ukraine (NBU) Andriy Pyshny signed a Credit Agreement with the European Union to secure up to EUR 35 billion in macro-financial assistance (MFA) through the Extraordinary Revenue Acceleration (ERA) mechanism using revenues from frozen Russian assets. They also signed a Memorandum of Understanding, as stated on the Ministry of Finance's website on Wednesday morning.
"The final volume of MFA will be determined after the approval of the loan amounts from all parties involved in the initiative. Given the proposed funding from the United States of $20 billion, macro-financial assistance from the EU could amount to EUR 18 billion," the department clarified.
The release notes that Ukraine is committed to implementing 14 measures in the areas of macro-stability, state enterprises, public governance, energy, rule of law, anti-corruption, and defense industry to attract this funding.
It is mentioned that the signatory from the EU was Vice-President of the European Commission Valdis Dombrovskis.
The Ministry of Finance emphasizes that these funds are part of the G7 countries' initiative under the Extraordinary Revenue Acceleration Loans for Ukraine (ERA) mechanism, which aims to provide a total of $50 billion by the end of this year. The repayment of the loan will occur through future revenues from frozen sovereign assets of the Russian Federation in the EU.
As previously reported, a special Ukraine Loan Cooperation Mechanism (ULCM) has been established, where extraordinary revenues from frozen Russian assets and other voluntary contributions made by member states or third countries will be directed. These resources will then be used to repay the principal amount and interest on the respective bilateral loan agreements of Ukraine with creditors.
"This is the next important step in attracting funds through the frozen assets of the aggressor country. In recent months, we have actively worked 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 solutions promptly," Marchenko commented on the signing.
As reported, the International Monetary Fund, in its updated findings from the fifth review of the Extended Fund Facility (EFF) program, indicated that upon the end of the war by the end of 2025, Ukraine will require $33.1 billion from the mentioned $50 billion to support its budget: $19.1 billion next year, $9.2 billion in 2026, and $4.9 billion in 2027. In a negative scenario where the war extends until mid-2026, Ukraine's budget will need the entire $50 billion to cover the deficit.
The EU and Ukraine signed a memorandum of understanding for a macro-financial loan of EUR 18.1 billion on November 28.
On Tuesday, December 3, the Verkhovna Rada adopted as a basis and in general the draft law No. 12232 on amendments to the Budget Code, which officially regulates the attraction of funds from partners through revenues from frozen Russian assets.