The European Union has officially approved a massive loan package for Ukraine amounting to €90 billion, which will be provided over the years 2026–2027. The first funds are expected as early as May or June of this year.
This is reported by Finway
Financing Mechanism and Distribution of Tranches
Funding will be provided through joint borrowings by the EU on international capital markets under the guarantees of the EU’s common budget. This is only the second instance in EU practice of using such a mechanism, which was previously applied during the formation of the recovery fund after the pandemic.
Each year, Ukraine will receive €45 billion, allowing for effective resource allocation to the most critical areas. In 2026, €28.3 billion will be directed towards defense needs, while another €16.7 billion will go towards social budget support. The latter amount is divided equally: €8.35 billion is allocated through macro-financial assistance, and another €8.35 billion is within the Ukraine Facility program. Over the course of two years, €60 billion will be directed towards military assistance, and €30 billion towards the civilian sector.
Loan Repayment Conditions and Consultations Between Parties
The conditions for repaying this loan deserve special attention. Ukraine is not obligated to repay the debt until Russia pays reparations for the damages caused by the war. In the event of non-compliance with this condition, the European Union reserves the right to use frozen Russian assets to repay the loan instead of Ukraine.
“Ukraine is not obligated to repay the loan until Russia pays reparations for the war damages. If this does not happen, the EU reserves the right to utilize frozen Russian assets to repay the debt instead of Kyiv.”
Currently, the parties continue technical consultations regarding the final parameters of the agreement, including the number and sizes of individual tranches.