European Commission raises a further EUR 11 billion for NextGenerationEU and to support Ukraine
October 16, 2022.
The European Commission has today issued EUR 11 billion in a dual tranche transaction, the proceeds of which will be used to support Ukraine under the EU's MFA programme and Europe's recovery under the flagship NextGenerationEU programme. The deal consisted of a €5 billion tap of the 7-year bond due on 4 December 2029 and a new 20-year bond of 6 billion due on 4 November 2042.
Commissioner in charge of Budget and Administration, Johannes Hahn, said: “EU funding is a concrete expression of solidarity with Ukraine and Member States recovering from the pandemic. Today, we have successfully and under challenging market conditions raised a further €11 billion. Of them, €2 billion will be released swiftly to help Ukraine in this war of aggression on European soil.”
From the funds raised through the sale of the new 20-year bond, 2 billion will be granted as loans to Ukraine. This will be the first instalment of the €5 billion in macro-financial assistance (MFA) loans to Ukraine agreed on 20 September 2022.
With today's transaction, the Commission has issued a total of 86.6 billion in long-term funding under NextGenerationEU in 2022 and €157.6 billion since the start of the programme in June 2021. Of this total, €36.6 billion have been issued since July 2022. This represents 73% of the Commission's NextGenerationEU funding target for the second half of the year, with further transactions – both auctions and syndications – planned for late October, November and possibly December 2022, as per the funding plan published in June 2022.
Following today's transaction, the Commission has so far raised €3 billion under its MFA programme for Ukraine in the second half of the year, on top of 1.2 billion earlier in 2022. This will be followed by further loans to Ukraine in the coming weeks. This has been part of the extraordinary support of 19 billion secured by Team Europe for Ukraine to date.
On the basis of the funds raised, the Commission has so far paid out nearly €113 billion under the Recovery and Resilience Facility and, as of end-June, over €15 billion under other EU programmes which benefit from NextGenerationEU financing. The Commission will continue to use the funds raised to support Europe's post-pandemic recovery, financing Member States under the Recovery and Resilience Facility as well as via other EU programmes.
NextGenerationEU is a temporary recovery instrument of more than 800 billion in current prices to support Europe's recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe.
To finance NextGenerationEU, the Commission – on behalf of the EU – is raising from the capital markets up to around €800 billion between now and end-2026.
In parallel to NextGenerationEU, the Commission runs several back-to-back funding programmes to finance the specific needs of the EU Member States and third countries. This includes the macro-financial assistance programme, under which the Commission is currently providing support to Ukraine, among others.