Ukraine is launching two funds worth $1 trillion to bridge wartime financing gaps and lure European industry, betting on confiscated Russian assets and private investment to rebuild its economy and defense capabilities.
The two funds will support reconstruction and modernization initiatives, Ukrainian Prime Minister Denys Shmyhal said, announcing the initiative at the ministerial-level, Ukraine Donor Platform meeting – part of the Ukraine Recovery Conference (URC-2025) in Rome.
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“The first is the Ukraine Fund, valued at $540 billion, as this is the estimated cost of Ukraine’s reconstruction according to the World Bank,” Shmyhal is quoted as saying, according to a Thursday, July 10 press release on the government’s website.
Shmyhal said the Ukraine Fund will be administered by Ukraine and funded through confiscated Russian assets and a special tax on Russian raw material exports.
“The second is the European Structural Fund to Support Ukraine, worth $460 billion,” the prime minister is quoted. According to Shmyhal, this fund will include investments from the European private sector to develop production facilities in Ukraine.
Despite the pretense of negotiations, Russia’s repeated strikes on civilians across Ukraine seem to signal it will continue the war beyond 2025, and likely create a funding shortfall in 2026.
Ukraine’s international partners have yet to come up with a solution for the lack of 2026 financing, leaving less time to design solutions in the second half of the year.
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Ukraine has a projected budget deficit of $46.3 billion for 2026. Assuming the IMF program, the remainder of the money, and the Ukraine Facility project offer another $15.1 billion loan for the next year, Kyiv will still have a funding gap of roughly $17.7 billion in 2026.
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