THE ROLE OF EUROPEAN FINANCIAL INSTITUTIONS IN IMPLEMENTING CROSS-SECTORAL PROGRAMS FOR THE RECOVERY AND DEVELOPMENT OF THE UKRAINIAN ECONOMY

Abstract

Amid a full-scale war, Ukraine faces unprecedented recovery needs under severe fiscal and institutional constraints. This article examines the role of European financial institutions (EFIs), such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), in financing cross-sectoral programs for economic renewal. The study maps the EFI instrument mix – including grants, concessional loans, guarantees, and technical assistance – and shows how tailored combinations enhance project bankability and mobilize private and municipal co-financing across key sectors like infrastructure, energy, SMEs, and healthcare.
Drawing on recent initiatives like the Ukraine Facility and public-private partnership (PPP) models, the article illustrates how social, environmental, and economic objectives can be integrated within cohesive financing frameworks and sequenced through the project cycle. It then identifies major implementation bottlenecks: limited local institutional capacity, regulatory complexity, fragmented inter-agency coordination, and insufficient project preparation facilities.
To improve aid effectiveness, the paper proposes several recommendations: establishing robust state-municipality-business coordination platforms; systematic capacity building for project design and management; standardizing project-cycle tools and procurement templates; and implementing transparent, data-driven mechanisms linked to key performance indicators (KPIs). The authors conclude that embedding a cross-sectoral approach in recovery finance – supported by EFIs, PPPs, and local capacity-building – can accelerate Ukraine’s European integration while laying the foundations for sustainable growth, enhanced resilience, and institutional modernization.