News item | 06-10-2023 | 15:45
The Netherlands is allocating 102 million euros for the third support package to Ukraine in 2023. Minister Schreinemacher for Foreign Trade and Development Cooperation reports this to the House of Representatives on behalf of the cabinet. Of this additional contribution, 60 million euros will go to supporting Dutch companies that want to contribute to the reconstruction of the country. This money is intended for export credit insurance to cover payment risks of investments and transactions in the country. To help Ukraine prepare for the winter, 30 million euros will also be spent on purchasing gas and supplying parts for the electricity network. The remaining 12 million euros goes to support recently liberated areas and to the IMF, which provides technical assistance to Ukraine to implement reforms.
To help Ukraine survive the Russian war, the Dutch contribution to recovery and reconstruction remains crucial. The new support package is based on the needs assessment by the Ukrainian authorities, the World Bank and the European Commission. The Netherlands is thus contributing to Ukraine’s most urgent aid need.
Winter preparations
It is expected that Russia will also attack the energy infrastructure this winter. Ukraine needs a lot of help in restoring its energy infrastructure: the Ukrainian Ministry of Energy estimates that between $3.7 and $4.0 billion is currently needed. To help the country prepare for the coming months, the Netherlands is earmarking 20 million euros for the purchase of gas and the creation of strategic gas reserves through the European Bank for Reconstruction and Development. In addition, 10 million euros will go to supplies of, among other things, transformers, switching components and cables that are needed to restore the electricity grid.
Export credit insurance
Given the enormous needs in Ukraine, in addition to the public sector, a contribution from the private sector will also be needed to recover and rebuild the country. The government therefore encourages Dutch companies to contribute to the reconstruction of Ukraine. Dutch entrepreneurs are very interested in this and also have unique knowledge and expertise in-house. At the same time, doing business in a country at war entails major risks, which can translate into possible payment problems. Export credit insurance for Ukraine therefore provides cover for investments and transactions by Dutch companies with risks that are not covered by commercial insurers. This makes it more accessible for entrepreneurs to export to and invest in Ukraine and thus contribute to the reconstruction. With the additional contribution of 60 million euros it is possible to insure a total of 120 million euros in Ukraine.
Financial stabilization and reforms
Ukraine has an interest in financial and economic stability and strong institutions to keep the economy running and to survive the war. That is why Ukraine has had an IMF program with an extensive reform agenda since the spring. The Netherlands contributes 7 million euros to the IMF fund, which provides technical assistance to the country and supports Ukraine in implementing the reform agenda. This agenda aims to improve financial stability and economic recovery and ensure stronger institutions.
The Netherlands will also contribute 5 million euros to the ‘Partnership Fund for a Resilient Ukraine’. The fund focuses on strengthening decentralized authorities and rapid recovery after liberation from Russian occupation. This includes repairs to drinking water, electricity, primary health services and education.