The European Commission plans to give Ukraine about €45bn next year under its Ukraine Support Loan, with more than two-thirds of the money going on weapons production.

Of the total, €31.7bn is earmarked for Ukraine's defence industrial capacity. The remaining €13.3bn will be split equally between the Ukraine Facility and macro-financial assistance tied to Kyiv's International Monetary Fund (IMF) programme, Kyiv Independent reported on October 30, citing a Commission press release.

"With today's proposal, we are providing Ukraine with much-needed predictability and helping maintain essential public services," said Commission President Ursula von der Leyen, adding that the issue was "high on the agenda" at the EU-Canada summit in Montreal.

As IntelliNews reported in a feature on war and money, a lot of uncertainty surrounds Ukraine’s funding for the next two years with much less arriving in the government’s coffers than has been pledged and large allocations in the two year budget without commitments from partners.

The new pledge is the second half of the €90bn loan the EU approved in April, and it will not close the hole in Kyiv's budget. Ukraine still faces an estimated €70bn shortfall in 2027, which EU leaders asked the Commission to plug at their October summit, and Kyiv has already asked for money beyond the loan.

The budget support stays conditional on rule-of-law and anti-corruption reforms and on the stability and sustainability of the economy. The proposal now needs the approval of the Council of the EU, after which member states take the final decision on how the funds are allocated.

The first half of the loan, paid out this year, set aside €16.7bn for the budget and €28.3bn for defence production. By late October Ukraine had drawn only about €4bn of the budget money, Raiffeisen Research calculated, as reform-linked tranches slipped.

The cost of those missed reforms showed up in a separate proposal. The Commission wants to pay Ukraine €8.04bn under the Ukraine Facility, €264.6mn less than Kyiv requested, because it has not finished putting independent supervisory boards into state-owned companies or adopted a plan to open up its energy markets, European Pravda reported, citing a draft Council implementing decision dated October 21.

The payment covers partial instalments four, seven, eight and nine, with the ninth accounting for €7.28bn. After deductions to repay earlier pre-financing, Ukraine would receive about €7.8bn, EU sources told the paper. The Council is expected to decide by the end of November.

The Commission judged 16 of the 18 steps tied to the ninth instalment complete. They include a new IT system for enforcing court rulings, a human rights strategy, an anti-trafficking programme, a plan to cut state ownership of banks, an employment strategy and preparations for an independent review of the energy regulator NEURC.

The two gaps are supervisory boards with a majority of independent members at state-owned companies, where Kyiv has filled 10 of the required 15, and a roadmap for gradually liberalising the gas and electricity markets.

Brussels softened the cut by crediting the partial progress on boards and Ukraine's early request for an International Atomic Energy Agency (IAEA) regulatory review mission, a step not due until the 10th instalment. That added €529.4mn back and kept the shortfall to €264.6mn instead of almost €800mn.

Ukraine received €2.9bn from the facility on October 2, the payment the Council approved in September that included the first Support Loan cash routed through it.

Help from outside the bloc remains thin. Norway pledged $9bn and the UK $13bn for Ukraine in October, Kyiv Independent said, and Canada is expected to follow, but a Commission count in late October put non-EU pledges for 2027 at just €4bn.