New support package for Ukraine: more than €100 million for investment, recovery and reforms
The Netherlands will provide Ukraine with a third support package in 2023 amounting to €102 million. The Minister for Foreign Trade and Development Cooperation, Liesje Schreinemacher, informed the Dutch House of Representatives on 6 October 2023 about the package on behalf of the government.
The additional package includes €60 million in support for Dutch companies who aim to contribute to reconstruction in Ukraine. This will be spent on export credit insurance to cover payment risks arising from investments and transactions in Ukraine. In preparation for winter, another €30 million will be allocated to buy gas and supply materials needed for the country’s electricity grid. The remaining €12 million will be spent on support for recently liberated areas and on IMF technical assistance for Ukraine as it carries out reforms.
Dutch funds for recovery and reconstruction are crucial to Ukraine’s ability to withstand Russia’s armed aggression. The latest support package was assembled in response to a needs assessment by the Ukrainian authorities, the World Bank and the European Commission. By providing it, the Netherlands is helping Ukraine address its most urgent needs.
Preparations for winter
Russia is expected to target Ukraine’s energy infrastructure again this winter. Ukraine requires significant aid to restore its energy infrastructure; its energy ministry estimates that the country needs $3.7 to $4 billion at present. To help it prepare for the coming months, the Netherlands will provide €20 million, via the European Bank for Reconstruction and Development, to purchase gas and build up strategic gas reserves. A further €10 million will cover deliveries of transformers, switch components and cables needed to repair the electricity grid.
Export credit insurance
Given the enormous extent of Ukraine’s needs, the recovery and reconstruction process will require contributions from both the public and private sectors. For this reason, the government is encouraging businesses in the Netherlands to play their part. Dutch businesses are very interested in doing so. What’s more, they have unique knowledge and expertise. At the same time, doing business in a country that is at war involves major risks, which can result in payment problems. Export credit insurance for Ukraine covers investment and transaction risks that are not covered by commercial insurers. This makes it easier for Dutch companies to invest in and export products to Ukraine, and thus contribute to reconstruction. This extra contribution of €60 million brings the total amount of coverage in Ukraine to €120 million.
Financial stabilisation and reforms
To keep its economy running and stand its ground as the war continues, Ukraine needs financial and economic stability and strong institutions. For this reason, the IMF approved a programme for an extensive reform agenda in the spring of 2023. The Netherlands will contribute €7 million to the IMF fund, which will provide Ukraine with technical assistance as it carries out reforms. The reform agenda is geared towards improving financial stability and economic recovery, and bolstering institutions.
The Netherlands will also contribute €5 million to the Partnership Fund for a Resilient Ukraine, whose aim is to reinforce local and regional authorities and assist in quick recovery in areas liberated from Russian occupation. This includes the repair of drinking-water and electricity infrastructure, and resources for primary healthcare and education.
Originally published at https://www.government.nl/latest/news/2023/10/06/new-support-package-for-ukraine-more-than-100-million-euro-for-investment-recovery-and-reforms
