Further 550M euro from the EIB Group backed by EU guarantee reaches Ukraine

The European Investment Bank (EIB), the European Union’s bank, has this week disbursed the second tranche of the immediate assistance to Ukraine, the European Commission (EC) said on October 12.

“The amount of 550 million euro disbursed this week will help the Ukrainian government to cover urgent financing needs, restore some of the most critical damaged infrastructure, resume the provision of municipal services, including transport services, vital infrastructure networks, and support cities in the process of recovering basic functions and basic services for the population,” the EC said.

The first tranche of 500 million euro was paid out on September 14.

The EC said that these tranches amount to 1.05 billion euro, which are part of the second 1.59 billion euro package of the EIB’s Ukraine Solidarity Urgent Response, developed in close cooperation with the EC.

The remaining 540 million euro will be used for resuming implementation of existing EIB-financed projects in Ukraine, as they progress.

This second Ukraine Solidarity Urgent Response package was prepared in cooperation with the EC as an urgent measure to support Ukraine in the context of Russia’s unprovoked war of aggression, the EC said.

The package benefits from an EU guarantee under the external lending mandate and complements the 668 million euro of immediate financial support for Ukraine provided by the EIB in early March 2022.

In a separate statement, the EC said that it had on October 11 issued 11 billion euro in a dual tranche transaction; the proceeds of which will be used to support Ukraine under the EU’s macro-financial assistance (MFA) programme and Europe’s recovery under the flagship NextGenerationEU programme.

The deal consisted of a five billion euro tap of the seven-year bond due on December 4 2029 and a new 20-year bond of six billion euro due on November 4 2042.

European Commissioner in charge of Budget and Administration, Johannes Hahn, said: “EU funding is a concrete expression of solidarity with Ukraine and Member States recovering from the pandemic.

“We have successfully and under challenging market conditions raised a further 11 billion euro. Of them, two billion euro will be released swiftly to help Ukraine in this war of aggression on European soil,” Hahn said.

From the funds raised through the sale of the new 20-year bond, two billion euro will be granted as loans to Ukraine. This will be the first instalment of the five billion euro in MFA loans to Ukraine agreed on September 20 2022.

With this transaction, the EC has issued a total of 86.6 billion euro in long-term funding under NextGenerationEU in 2022 and 157.6 billion euro since the start of the programme in June 2021.

Following this transaction, the EC has so far raised three billion euro under its MFA programme for Ukraine in the second half of the year, on top of 1.2 billion euro earlier in 2022.

This will be followed by further loans to Ukraine in the coming weeks, the EC said.

“This has been part of the extraordinary support of 19 billion euro secured by Team Europe for Ukraine to date,” the statement said.

(Photo: Frank Schwichtenberg)

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