The EU pays €250 million non-reimbursable assistance to Ukraine under the State Building Contract (12/06/2014)

The EU has disbursed €250 million of non-reimbursable assistance to Ukraine. The payment is the first, fixed tranche of the State Building Contract (SBC) which is worth up to €355 million in total. 

The SBC is a major EU initiative to support Ukraine in addressing the fundamental problems that have hampered reform and European integration in the past. There is a particular emphasis on supporting Ukraine's fight against corruption.

This payment reflects the EU's positive assessment of progress in Ukraine's system of public finance management and especially the public procurement law of 10 April. The payment is possible now due to the fact that the Speaker of the Rada (Parliament of Ukraine), Mr Turchynov, ensured that legislation proposed by members of the Rada to support mobilisation of the army was not used to weaken the public procurement law.

Jan Tombinski, the Head of the EU Delegation to Ukraine, said: "This payment is based on trust that Ukraine is on the way to building a strong democracy. This requires strong commitment from the Government to reform as regards for example public administration reform, competitive public procurement and, especially, the fight against corruption."

The first, fixed tranche is paid based on fulfilment of four general conditions (public policy, macroeconomic stability, public financial management, and budgetary transparency). The second, variable tranche (expected to be paid in the second quarter of 2015 for a maximum of €105 million) will be based on results achieved in the fight against corruption, public procurement, access to information, public finance management, civil service reform, constitutional reform and electoral legislation.

The EU Delegation to Ukraine will closely monitor achievement of the results for the second tranche, in cooperation with civil society and the Government of Ukraine.

The State Building Contract is one of the major deliverables of the €11 billion package to support Ukraine, announced by the President of the European Commission on 5 March, 2014 along with the recently decided €1.6 billion EU Macro-Financial Assistance loan programme for Ukraine.

Background information

The general objective of the State Building Contract is to support the Government of Ukraine in addressing short-term economic problems and preparing for in-depth reform in the context of political association and economic integration with the EU on the basis of the Association Agreement (including the Deep and Comprehensive Free Trade Area (AA/DCFTA)) through support to improved governance, fight against corruption, judiciary reform and public administration reform, including reform of civil service and service in local self-government bodies. The State Building Contract is a budget support programme, meaning that it is aid channelled directly to Ukraine's budget, to be disbursed according to the country’s own budget allocation, procurement, accounting and control systems.The Financing Agreement for the State Building Contract was signed by the President of the European Commission Jose Manuel Barroso and Prime Minister of Ukraine Arseniy Yatsenyuk on May 13, 2014.

For more information on EU-Ukraine Cooperation projects, please contact the EU Delegation to Ukraine:

Mr Martti Lutsar, Communications Manager (English, Italian, Finnish, Estonian), martti.lutsar@eeas.europa.eu; +38 (044) 390-80-10