EU funding for Ukraine: the Ukraine Facility and the EUR 90 billion Support Loan

The scale of the task

The joint assessment by the World Bank Group, the Government of Ukraine, the European Commission and the United Nations (RDNA5) put direct war damage at USD 195.1 billion as of 31 December 2025, with total reconstruction and recovery needs estimated at almost USD 588 billion over the next decade. Coordination of the international response runs through the Ukraine Donor Platform, established by G7 leaders in December 2022, which brings together Ukraine, the G7, the EU and the international financial institutions. Within that structure, the EU operates the two largest dedicated instruments.

Instrument one: the Ukraine Facility

Regulation (EU) 2024/792 established the Ukraine Facility as the EU's consolidated support instrument, replacing the earlier macro-financial assistance programmes. It entered into force on 1 March 2024 and establishes the Facility for the period 2024 to 2027, with a ceiling under Article 6 of EUR 50 billion for that period, split as EUR 33 billion in loans and EUR 17 billion in non-repayable support. That ceiling is no longer the whole of the EU's commitment: Regulation (EU) 2026/468 provides that amounts under the Ukraine Support Loan are in addition to it. The Facility rests on three pillars.

Pillar I, the Ukraine Plan, carries the direct budget support. Payments are made against Ukraine's implementation of the Ukraine Plan, the government's own programme of recovery, reconstruction and accession-linked reforms, underpinned by a set of conditions and a disbursement timeline. A pre-financing of up to 7 per cent of the Pillar I loans was available on request. Continued support carries a standing precondition: Ukraine must uphold effective democratic mechanisms and the rule of law. Progress is tracked on a public scoreboard, and the European Parliament may call the Commission to a Facility dialogue at least every four months.

Pillar II, the Ukraine Investment Framework, is the part built for the private sector. Through budgetary guarantees (the Ukraine guarantee) and blending of grants with loans from public and private institutions, the UIF de-risks investment that would not otherwise happen in a wartime economy. The first investment programmes, worth EUR 1.4 billion in guarantee and grant agreements, were signed at the Ukraine Recovery Conference in Berlin in June 2024. Two allocation rules shape the pipeline: at least 20 per cent of UIF funding, together with Ukraine Plan investments, must contribute, to the extent possible in a war-torn country, to climate, environmental and green-transition objectives, and a minimum of 15 per cent of guarantee capacity is reserved for micro, small and medium-sized enterprises.

Pillar III funds accession assistance: technical support for aligning Ukrainian law with EU law, administrative capacity and civil society.

Instrument two: the Ukraine Support Loan

In February 2026 the EU added a second, larger layer. Regulation (EU) 2026/467 of 24 February 2026, adopted as a measure implementing enhanced cooperation between 24 participating member states, establishes the Ukraine Support Loan (USL): a maximum of EUR 90 billion for 2026 and 2027, available until 31 December 2027, made available in instalments and disbursable in one or more tranches, with all disbursements to take place by 31 December 2028. The indicative split is EUR 30 billion of budget support and EUR 60 billion for defence industrial capacity, and a Council implementing decision of 23 April 2026 made EUR 45 billion accessible for 2026. Two features distinguish it from anything the EU has done before.

First, the legal construction. The USL is financed through EU borrowing on the capital markets, guaranteed by the headroom of the EU budget, and structured as a loan to be repaid from reparations due by Russia; the EU has reserved its right to use Russian assets immobilised in the Union for repayment, in accordance with EU and international law. Reparations are the principal trigger, and Article 20 adds two more. The USL is a limited-recourse loan that falls due, pro rata with the G7 reparations loans and the ERA loans and up to the amount received, when Ukraine receives cash or non-monetary reparations, indemnities or a settlement from Russia; in full if Ukraine breaches the standing precondition of democratic mechanisms, the rule of law and human rights in Article 5(1); and to the value of any established fraud, corruption or other illegal activity detrimental to the EU's financial interests in managing the loan. Amounts not covered by a trigger stay in place until a further one occurs. The regulation was adopted through enhanced cooperation, meaning a subset of member states carries the instrument.

Second, the split: the assistance runs through two components, one strengthening Ukraine's defence capabilities and defence industry, the other supporting the functioning of the state and economic resilience, channelled through macro-financial assistance and the Ukraine Facility structures. According to the Council, roughly EUR 60 billion is oriented to military assistance and EUR 30 billion to economic support.

Implementation moved quickly. Ukraine submitted its Financing Strategy under the regulation in March 2026; the Commission assessed it positively and put forward its proposal on 1 April 2026; the Council adopted the implementing decision on 23 April 2026; and the Commission disbursed the first EUR 3.2 billion instalment in June 2026. For context: the Council puts overall EU support for Ukraine since 2022, including military support and assistance to refugees, at over EUR 216 billion.

Where companies meet the money

Neither instrument pays companies directly, on either side of the border. The funds reach the private sector through defined channels, and the first task is to identify which channel fits the business model. The second is eligibility. Article 11 of the Facility regulation opens Facility-financed procurement, grants and prizes to entities effectively established in the member states, Ukraine, the Western Balkans, Georgia, Moldova and the EEA, and in countries for which the Commission has established reciprocal access; supplies and materials must originate from those countries unless they cannot reasonably be sourced there, and where IFIs or Ukrainian bodies implement, their own eligibility rules apply as well. The United Kingdom has reciprocal access for one year from 23 July 2026 under Implementing Decision (EU) 2026/1445, as do Canada, Japan and the United States under parallel decisions; Switzerland is outside the EEA and, as at the date of this update, has no reciprocal-access decision, so a Swiss company reaches Facility-financed tenders through an eligible establishment or under the exceptions in Article 11(8).

• Public procurement. Budget support under Pillar I and the USL's economic component flows through the Ukrainian state budget and finances, among other things, reconstruction procurement. Projects are planned and published through DREAM, Ukraine's state digital ecosystem for reconstruction projects, which is the practical starting point for identifying opportunities by sector and region and shows each project's procurement status through its Prozorro integration. The tenders themselves are published and answered on Prozorro, Ukraine's electronic procurement system, and IFI-financed contracts run on the lender's own platform: EBRD project procurement notices appear only on its ECEPP portal, where bidders register.
• Defence component. The EUR 60 billion is spent through Ukraine's own procurement under Ukrainian law, validated by the Commission or participating member states, through SAFE common procurement, through agreements with member states, the European Defence Agency or international organisations, and through contributions to other EU instruments (Article 13(8) of Regulation (EU) 2026/467); contracts signed after 14 January 2026 qualify. Eligibility is its own regime under Article 13: the product must fall within two listed categories; the manufacturer and its production subcontractors must be established and managed in the EU, an EEA EFTA state or Ukraine and free of third-country control, with derogations for a subcontractor holding 15 to 35 per cent of contract value, for screened or guaranteed EU-established entities and for urgent needs; production infrastructure must sit in those territories; components from elsewhere are capped at 35 per cent of component cost; and for category-two products the manufacturer must control the design. The United Kingdom counts as an EEA EFTA state for both categories for activities from 13 July 2026 (Council Implementing Decision (EU) 2026/1879), the other conditions unchanged. Switzerland is not an EEA EFTA state and has no equivalent act, so a Swiss manufacturer qualifies only under the derogations, through an EU-, EEA- or Ukraine-established entity that is not Swiss-controlled, or through an EU-established subsidiary that has passed screening or given verified guarantees.
• UIF-backed financing. The Ukraine Investment Framework works through implementing partners, chiefly the international financial institutions, which extend guaranteed loans, guarantees and blended finance to projects and financial intermediaries in Ukraine. Companies typically access this channel through partner banks or directly through IFI facilities. The EBRD, the largest institutional investor in Ukraine, complements this with its own wartime lending. The Commission also runs a rolling call for expressions of interest for investment projects in Ukraine of at least EUR 50 million with 30 per cent promoter equity, open to companies whose real seat is in the EU, the EEA or Ukraine; a positive assessment leads to an introduction to UIF implementing partners and carries no grant and no financing commitment, and UK- or Swiss-seated companies take part through an EU-, EEA- or Ukraine-seated vehicle or joint venture.
• Risk cover. EU guarantees interact with the wider insurance architecture, including MIGA's guarantee programmes for Ukraine. For most private investments, bankability is built by stacking these layers: project finance from an IFI, political risk cover, and a UIF-supported guarantee where available.
• National programmes alongside. The EU instruments operate alongside national schemes, from UK Export Finance cover for UK exporters to Switzerland's cooperation programme with its earmarked support for Swiss private-sector participation. The right structure often combines an EU-backed channel with a national one.

Every channel carries substantive compliance expectations. The Facility's conditionality makes anti-corruption architecture a disbursement issue, procurement runs on transparency systems, and sanctions and export-control screening applies to counterparties and supply chains throughout. Companies that arrive with their compliance file in order move faster through every gate.

What to watch through 2027

Three developments will shape the next two years. First, the pace of USL disbursements against the approved Financing Strategy, which sets the rhythm of budget-funded procurement. That rhythm is already shifting: on 30 July 2026 the Council amended the Ukraine Plan to reflect more than EUR 8 billion in additional financing for 2026, provided through the Support Loan, with the amended plan adding further reform steps, including on the rule of law and anti-corruption. Second, the growth of the UIF guarantee pipeline, which determines how much private investment gets de-risked and in which sectors. Third, the question of what follows in 2028: the Facility and the USL both run to end-2027, and the design of the successor architecture, within the EU's next budget cycle, will be negotiated in the meantime. Firms building Ukraine strategies should plan around those dates.

What this means for you

• Map your route before your project. Procurement, IFI financing and guarantee-backed investment have different counterparties, timelines and documentation. Choose the channel, then design the structure.
• Build the compliance file first. Anti-corruption, sanctions screening and export-control checks are entry conditions across all channels.
• Use the coordination layer. The Donor Platform's outputs and DREAM's project data are public; strategy built on them is built on the same information the donors use.
• Check eligibility channel by channel, then combine EU and national instruments. UK companies hold time-limited access under the Facility and access under the defence component from 13 July 2026; Swiss companies, as at the date of this update, hold neither, and their route runs through eligible establishments, the derogations and the national programme.
• Work with local execution. Ukrainian-law questions, permits and procurement mechanics sit with local counsel and partners; the international structuring, financing and compliance layer is where cross-border advisers add value.

Isak Legal advises Swiss, UK, US and European companies on structuring their entry into the Ukrainian market, and Ukrainian companies on reaching Western partners, financing and markets, including the funding, compliance and risk-allocation questions this architecture raises. See our Ukraine: Investment and Reconstruction page, or get in touch.

This client update is provided for general information only, reflects the position as at 26 September 2026 and does not constitute legal advice or create a lawyer-client relationship. Figures are drawn from the official sources linked above; always rely on the current official texts. For advice on a specific matter, please contact us.