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First tranche of €90bn EU loan for Ukraine could be paid out in April–June 2026
The Council of the European Union has approved its position on the legal framework for providing Ukraine with a €90 billion loan for 2026–2027. The EU now aims to swiftly reach an agreement with the European Parliament in order to release the first tranche as early as the start of the second quarter of 2026, the Council said.
The funds will be allocated to support Ukraine’s state budget and defense needs. The financing will be raised through EU borrowing on capital markets and guaranteed by the EU budget.
Who will repay the loan
A key condition of the arrangement is that repayments will be triggered only after Russia pays war reparations to Ukraine. In practice, the repayment burden is to be borne by Moscow as compensation for its aggression.
To secure favorable borrowing terms and support Ukraine’s debt sustainability, interest payments on the loan are expected to be covered by the EU budget. This will not affect the budgetary contributions of Czechia, Hungary and Slovakia, which opted out of the enhanced cooperation mechanism.
Cypriot Finance Minister Makis Keravnos said the agreement demonstrates the EU’s continued resolve to support Ukraine and its people, stressing that the new financing will strengthen the country’s resilience in the face of Russian aggression. He added that work with the European Parliament on the final legal texts is expected to be completed swiftly to enable the disbursement of the loans.
How the funds will be allocated
The €90 billion package will be provided via two channels:
€30 billion in macro-financial assistance through MFA instruments or under the Ukraine Facility, the EU’s dedicated tool for stable and predictable financial support for Ukraine’s budget;
€60 billion to support Ukraine’s investment in defense-industrial capacity and the procurement of military equipment, providing access to products from both Ukrainian and European manufacturers.
Disbursements will be aligned with Ukraine’s needs as set out in a financial strategy to be prepared by Kyiv and approved by the Council following an assessment by the European Commission. Funding will be conditional on compliance with strict requirements, including the rule of law and anti-corruption measures.
Defense procurement restrictions
As a rule, defense procurement will be limited to companies based in the EU, Ukraine, or the EEA–EFTA countries. Targeted exemptions may apply in urgent cases where required equipment is not available from eligible suppliers.
The Council’s mandate also allows third countries to be associated with specific defense procurements under two categories:
countries with bilateral agreements with the EU under the SAFE regulation, subject to delegated acts specifying eligible products;
countries with EU security and defense partnerships that commit to fair and proportionate financial contributions to borrowing costs and provide substantial financial and military support to Ukraine, to be formalized by a Council act.
Next steps
The Council now seeks to finalize negotiations with the European Parliament on the implementing regulation for the support loan and amendments to the Ukraine Facility. The European Parliament’s consent is also expected to be obtained via written procedure for changes to the EU’s multiannual financial framework to secure the necessary budgetary guarantees.
Once all legal steps are completed, the European Commission will be able to disburse the first tranche at the start of Q2 2026.
According to IMF estimates, Ukraine’s total financing needs for 2026–2027 amount to €135.7 billion, assuming Russia’s war ends in 2026. In December 2025, the European Council agreed that the EU would cover €90 billion of these needs, with the remainder expected to be provided by other partners, including G7 countries.
