The European Union, within the framework of the ERA loan and the Ukraine Facility, is allocating €5.9 billion to Ukraine for the restoration of energy infrastructure.
This is stated in a message on the EU website.
Ukrainian Prime Minister Yulia Svyrydenko explained that this amount includes €4.1 billion under the ERA Loans mechanism. This is the final tranche of an €18 billion program financed by proceeds from frozen Russian assets.
The European Union will provide another €1.8 billion within the framework of the Ukraine Facility, a financial support to Ukraine with a total amount of €50 billion for 2024–2027.
European Commission President Ursula von der Leyen also announced that the EU will provide Ukraine with an additional 2 gigawatts of electricity and transfer new equipment to combat Russian drones.
In addition, von der Leyen said that they are currently considering three options for financing Ukraineʼs needs in the coming years. In particular, they are considering using the EU budget to raise funds on the capital markets.
There is also talk of an agreement under which the partners will independently raise the necessary capital. The third option is a reparations loan based on frozen Russian assets.
What is a "reparation loan"?
The possibility of providing Ukraine with a €140 billion loan using frozen Russian assets has been discussed since early October. At that time, EU leaders were unable to agree on the loan — Belgium opposed it, and France and Luxembourg were concerned about the legal consequences.
The European Commission has proposed providing Ukraine with a loan using Russian state assets held in Euroclear, a Belgian financial institution. Under the plan, if Russia refuses to pay reparations to Ukraine after the war, it will lose rights to these assets.
Belgium opposed the plan out of concern that Russia would sue it if it went ahead. Belgian Prime Minister Bart de Wever asked the other 26 EU countries to guarantee coverage of legal and financial risks.
Politico reported on October 21 that EU ambassadors had tentatively agreed on a plan to provide a “reparations loan” for Ukraine. However, at a meeting on October 23, EU leaders did not agree to allocate the loan and postponed the issue until December.
- The EU launched a new €37 million project on November 12 for the transparent recovery of Ukraine. It is designed to strengthen the national governance system and the regulatory framework for Ukraineʼs reconstruction.
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