Ukraine Receives €3.47B EU Loan for Defense Needs

Ukraine has received a new €3.5 billion ($3.9 billion) tranche from the EU under the Ukraine Support Loan mechanism, with the funds set to strengthen the country’s defense capabilities and cover urgent government spending. According to Prime Minister Serhii Koretskyi, the latest disbursement will be allocated to defense needs and other priority expenditures.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. “These funds will be directed toward strengthening our defense and financing urgent needs,” Koretskyi said in a statement on Thursday. European Commission spokesperson Balázs Ujvári said during a briefing in Brussels that most of the new tranche would cover the bulk of a €2.5 billion ($2.8 billion) contract for the purchase of 16 Saab Gripen fighter aircraft. The remaining funds will be used to procure drones, including long-range and jet-powered systems, missiles and additional air defense equipment. €11.6 billion already disbursed According to Koretskyi, Ukraine has received a total of €11.6 billion ($13.3 billion) through the Ukraine Support Loan mechanism so far this year. Of that amount, €3.2 billion ($3.7 billion) has been allocated to support the state budget, while €8.4 billion ($9.6 billion) has been directed toward defense. Koretskyi thanked the European Commission and EU member states for what he described as their consistent support for Ukraine. The Ukraine Support Loan is a EU lending instrument worth up to €90 billion ($103 billion) for 2026-27. Other Topics of Interest Inside Ukraine’s Kill Zone, Where Drones Hunt Everything That Moves What Ukrainian soldiers endure every day in the kill zone, and how technology has transformed the face of war in the 21st century. Under the program, up to €60 billion ($68 billion) is earmarked for Ukraine’s defense needs, with the remainder intended to support macro-financial stability and other critical government expenditures as the country continues to defend itself against Russia’s full-scale invasion. Ukraine’s commitments in return A bill ratifying the loan agreement was registered in parliament on May 28 under No. 0376, submitted by Zelensky’s presidential office. The agreement’s memorandum of understanding sets conditions for a separate €8.4 billion ($9.6 billion) macro-financial assistance component, paid in three tranches. Across all three, Ukraine commits to upholding democratic institutions, human rights, and anti-corruption measures; preserving the National Bank of Ukraine’s (NBU) independence; and regularly reporting financial data to the European Commission, according to the memorandum. First tranche ($3.6 billion) – already disbursed: Submission of bills ending tax exemption on international parcels and taxing income from digital platforms; Extension of the 5% military levy for three years; Updated public finance management strategy and a new draft Customs Code; Appointment of a permanent head of the State Customs Service Second tranche ($4.2 billion): Laws on digital-platform taxation, the parcel exemption with an exception for security and defense goods; A property valuation system; Corporate tax rules aligned with the EU’s Anti-Tax Avoidance Directive (2016/1164); A VAT compliance roadmap, a 2027-29 budget declaration, and 2026 spending reviews; Parliament’s nomination of three experts to the Accounting Chamber’s board selection commission Third tranche ($1.7 billion): Reform of the preferential tax regime, aimed at anti-abuse rules against artificial business-splitting, limits on returning to the simplified system, differentiated rates for group three taxpayers by activity type, and alignment with EU Directive 2006/112/EC; Simplified VAT administration and further corporate tax alignment with the EU directive; A draft 2027 state budget, a new procurement strategy, and a defense procurement concept note; State Audit Service reform, 10 new audit committees, and adoption of the new Customs Code The Ukraine Support Loan is financed through EU borrowing on capital markets and backed by the EU budget, with repayment expected to come from future Russian reparations. The EU has provided more than €70 billion ($80 billion) in budget support to Ukraine since the start of Russia’s full-scale invasion, according to the finance ministry. Kyiv Post is Ukraine’s first and oldest English news organization, reporting since 1995. Its international reach – 97% of readers are outside of Ukraine – make it truly Ukraine’s global voice.