December 3, 2018 / 4:37 PM / 9 days ago

EU to launch debt deal to provide Ukraine 500 million euros of aid

Ukrainian and EU flags fly in front of the Presidential Administration in Kiev, Ukraine, April 7, 2016. REUTERS/Valentyn Ogirenko

LONDON (Reuters) - The European Union will launch a debt issue that will go towards providing aid to Ukraine as early as Tuesday, an official said, saying the funds could be ready for transfer next week.

The EU’s debt office said on Monday it would reopen its bonds maturing in April 2033 in the near future, subject to market conditions, according to two banking sources.

An EU official told Reuters the deal was connected to last week’s European Commission approval of 500 million euros (445.77 million pounds) of aid to the ex-Soviet nation.

“When we go to the market to raise funds, we link it directly to the beneficiary which explains why we are going to market now in the first week of December,” the official said, asking to remain anonymous as the matter was not yet public.

“The loan will come with economic policy conditions, but it will be untied financial assistance, so it’s not project-based or for a particular purpose. They can use it for the budget,” he added.

The aim is to complete the deal on Tuesday if market conditions permit, and the funds would likely be available early next week, he said.

Last week, the European Commission said on its website it has approved the disbursement of the 500 million euros of a new Macro-Financial Assistance programme to Ukraine. [bit.ly/2rgGmE1]

With this disbursement, the total aid extended to Ukraine by the bloc since 2014 will reach 3.3 billion euros, the largest amount of such assistance directed at any non-EU country.

Reporting by Abhinav Ramnarayan, editing by Karin Strohecker, Richard Balmforth

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