European Commission initiates reconstruction fund for Ukraine's rebuilding
The European Union (EU) has unveiled a groundbreaking investment initiative, the European Flagship Fund for Ukraine’s Reconstruction, at the Ukraine Recovery Conference held in Rome on July 10, 2025. This fund, described as the world’s largest equity fund dedicated to supporting Ukraine’s rebuilding, aims to mobilise over €500 million in private sector investment by 2026.
The fund, a joint effort by the EU, Italy, Germany, France, Poland, and the European Investment Bank (EIB), reflects a strong collaboration among European allies and international financial institutions. The initiative's overarching strategy is to use public money to leverage private sector participation, accelerating Ukraine’s recovery despite the ongoing conflict.
The fund focuses investments on key sectors such as energy, transport, critical raw materials, and dual-use industries. Beyond the equity fund, the broader Ukraine Investment Framework, chaired by the European Commission, has approved a comprehensive package of public and private investment programs targeting to mobilise about $43.4 billion for Ukraine’s recovery, reconstruction, and long-term growth.
In addition to the equity fund, the EU has signed agreements worth €2.3 billion in loan guarantees and grants, designed to unlock up to €10 billion in investments to rebuild critical infrastructure such as homes, hospitals, businesses, and energy systems. This financial and institutional backing demonstrates a unified commitment to supporting Ukraine’s recovery and future integration into European structures.
Ursula von der Leyen, President of the European Commission, presented a new package of agreements worth €2.3 billion to support Ukraine's recovery and reconstruction efforts. The EU has provided €165 billion in support to Ukraine over the past three years, and funding from Brussels is expected to cover 84% of Kyiv's budgetary expenditure by 2025. The European Commission has allocated €1 billion to Ukraine under the sixth tranche of the macro-financial assistance package, increasing the total to €18.1 billion.
The aim of the European Flagship Fund for Ukraine’s Reconstruction is to attract €500 million by 2026. European allies have approved the transfer of €3.05 billion from the Ukraine support fund. The program is expected to attract up to €10 billion in investments, developing Ukraine's direct investment ecosystem by attracting new capital and uniting market players.
Despite Russia's condemnation of any support for Ukraine from the West, whether military or financial, the EU remains committed to Ukraine's recovery and future integration. As President von der Leyen stated at the Ukraine Recovery Conference in Rome, "Europe is on Ukraine's side." The EU is confirming its role as Ukraine's strongest partner, aiming to attract up to €10 billion for the restoration of enterprises, the opening of hospitals, and ensuring energy security.
- The European Flagship Fund for Ukraine’s Reconstruction, a €500 million equity fund, is a joint effort between the EU, Italy, Germany, France, Poland, and the European Investment Bank (EIB), aiming to attract more private sector investing by 2026.
- The initiative, whose strategy is to use public money to leverage private sector participation, focuses investments on key sectors such as energy, transport, critical raw materials, and dual-use industries, as part of the broader Ukraine Investment Framework.
- In addition to the European Flagship Fund, the EU has signed agreements worth €2.3 billion in loan guarantees and grants, with the aim of unlocking up to €10 billion in investments for critical infrastructure reconstruction, such as homes, hospitals, businesses, and energy systems.
