The European Commission on Wednesday approved the allocation of the first regular tranche of EUR 4.2 billion of budget support to Ukraine under the Ukraine Facility and expects an early final decision from the EU Council, according to a press release from the European Commission.

"Despite all the hardship, Ukraine is taking forward key reforms for its recovery and to advance on its EU path. This paved the way for the Commission's green light of an additional payment of close to EUR 4.2 billion to Ukraine, and I trust the Council will now quickly agree," European Commission President Ursula von der Leyen said in the press release.

It is clarified that after adoption by the Council, this decision will bring the total amount of funds allocated by the EU to Ukraine since the start of the Ukraine Facility in March of 2024 to EUR 12 billion.

The European Commission recalled that regular quarterly payments within Ukraine Facility depend on Ukraine's fulfillment of pre-agreed requirements and ensure the predictability of financial assistance.

It is stated that based on the results of the assessment of the payment request submitted by Ukraine on July 9, 2024, the commission concluded that Ukraine has satisfactorily completed nine reform indicators associated with the first regular payment in support of the Ukraine Plan - Ukraine's reform and investment strategy for the next four years. These reforms cover public financial management, management of state-owned enterprises, the business environment, energy and mine clearance. In particular, the press release highlighted the reform of the Bureau of Economic Security, the adoption of new corporate governance standards for state-owned enterprises and the National Energy and Climate Plan, which coordinates and plans energy and climate policies until 2030, with specific goals including significant reductions in greenhouse gas emissions and increasing the share of renewable energy sources.

Ukraine Facility is an instrument that provides for the possibility of Ukraine receiving financial and technical assistance from the EU in the total amount of EUR 50 billion in 2024-2027. Of this, EUR 38.27 billion is allocated for budgetary support (of which EUR 5.27 billion in the form of grants), to the investment fund some EUR 6.97 billion, for technical and administrative support some EUR 4.76 billion.

The 2024 state budget has already received EUR 7.9 billion as part of Ukraine Facility: EUR 6 billion in two tranches of transitional financing and a tranche of EUR 1.9 billion of unconditional financing.

In order to receive subsequent tranches, Ukraine must submit a duly justified request for payment every quarter until the end of 2027. The Commission then assesses whether Ukraine has achieved satisfactory compliance with the conditions set out in the Council decision.

First Deputy Prime Minister, Minister of Economy Yulia Svyrydenko yesterday expressed hope that the EUR 4.2 billion tranche will be allocated in September, but the Ministry of Finance was not so specific and indicated that it expects to receive it in the autumn.