This document summarizes EU funding and financing incentives for projects in Ukraine. It outlines Hudson Financial's experience in Europe and working with EU funds. Key points include: - The EU has a 2020 strategy targeting employment, innovation, climate change, education, and poverty reduction. - EU funding opportunities for Ukraine include grants, loans from the European Investment Bank, and programs in areas like education (Erasmus) and cross-border cooperation. - The EU aims to strengthen ties with Ukraine through its Eastern Partnership program and Association Agreement, which promotes political and economic reforms. - In 2014 the EU pledged over €11 billion in loans and grants to support Ukraine's economic and political transition following events that year

1. funding & financing
your project
UKRAINE
November 2014

2. HUDSON FINANCIAL
INCENTIVES
1. Established in 2000 NL
2. Working throughout Europe since 2004
3. 10 years of experience in 20 countries
4. Cooperation ageements in another 15 countries
5. EU FUNDS, EIB, IPA, PHARE, FDI & TAX
Incentives

3. EU 2020 targets
Employment
• 75% of the 20-64 year-olds employed
• R&D / innovation
• 3% of the EU's GDP (public and private combined) to be invested in R&D/innovation
Climate change / energy
• greenhouse gas emissions 20% (or even 30%, if the conditions are right) lower than
1990
• 20% of energy from renewables & 20% increase in energy efficiency
Education
• Reducing school drop-out rates below 10% & at least 40% of 30-34–year-olds
completing third level education
Poverty / social exclusion
• at least 20 million fewer people in or at risk of poverty and social exclusion
NEIGBOURHOOD POLICIES

4. HOW TO APPROACH
FUNDING?
1. - ERR (ECONOMIC RATE OF RETURN
2. - IRR (PROFITABILITY)
3. - RISKS

5. Financing solutions
Economic
&
RISK LOW
RISK
LOW / MEDIUM
Social
Benefit Financial Profitability Risk level
VC
Banks
ERR
HIGH
IRR
HIGH
IRR
LOW /
MEDIUM
IRR
Negative
RISK HIGH
RISK MEDIUM
RISK HIGH
GRANT TAX Incentives Revolving funds
Grants & Tax Incentives EU & National
5
EU &
National
EIB facilities
EIB LOAN / Guarantees / PDA,
Innovfin
The
Hudson ®
model
N/A Medium
GRANT
AID & SUPPORT

6. │ 6
Budget EU
(eligibility simulation)
GDP/capita*
*index EU27=100
3 categories
of regions
Less developed regions
Transition regions
More developed regions
< 75 % of EU average
75-90 %
> 90 %
Regional GDP figures: 2006-07-08
© EuroGeographics Association for the administrative boundaries

7. EU BUDGET -> UKRAINE

8. EU “NEIGHBOURS”

9. 2013
In mid-2013 the EU-Ukraine Council endorsed
an updated EU-Ukraine Association Agenda ,
designed to pave the way for the Association
Agreement and the Deep and Comprehensive
Free Trade Area (DCFTA ).

10. 2014
On 5 March 2014 the European Commission agreed on a financial
assistance package of at least EUR 11 bn in loans and grants from the
EU budget and EU-based international financial institutions, to:
• help stabilise Ukraine's economic & financial situation
• support transition
• encourage political & economic reforms
• support inclusive development.

11. 2014
After signing the political chapters of the EU-Ukraine
Association Agreementat the EU summit of 21 March
2014, both parties signed the remaining sections of the
Agreement - including the Deep and Comprehensive Free
Trade Area (DCFTA) - in the margins of the EU summit of
27 June 2014. Ukraine is expected to ratify the
Agreement later this year. The aim is to start applying
certain provisions (including nearly all the DCFTA section)
provisionally from 1 November 2014.

12. EASTERN PARTNERSHIP
Launched in 2009B is a joint initiative between the EU, EU countries and the eastern European partner countries. It
enables partner countries interested in moving towards the EU and increasing political, economic and cultural links
to do so. It is underpinned by a shared commitment to international law and fundamental values - democracy, the
rule of law and respect for human rights and fundamental freedoms - and to the market economy, sustainable
development and good governance. The EU has put forward concrete ideas for each partner country. The aim is to
improve relations with individual countries.
The Partnership:
• promotes democracy and good governance
• strengthens energy security
• promotes sector reform and environment protection
• encourages people-to-people contacts
• supports economic and social development
• provides additional funding for projects to reduce social inequality and increase stability.

13. Common values
Partnership
The Partnership is based on common values:
• Democracy and the rule of law
• Respect for human rights and freedoms
• Commitment to market economy
TWO DIMENSIONS
1. Bilateral: developing closer cooperation between EU
and partner country
2. Multilateral: bringing partners closer within
framework for exchange and cooperation

14. 6 bilateral aspects:
• 1. New contractual relations
2. Integration into EU economy
3. Easier travel to the EU
4. Energy and transport cooperation
• 5. Economic and social development
• 6. Financialsupport

15. Multilateral Platforms -
2014-2017
• Platform 1 - "Democracy, Good governance
and Stability"
• Platform 2 - "Economic Integration and
Convergence with EU Policies"
• Platform 3 - "Energy Security"
• Platform 4 - "Contacts between people"

16. ENERGY & ECONOMY
• Improved infrastructure interconnection Integration of energy markets
and transport services
• Enhanced cooperation among partners
• Reduce regional disparities
• Support agriculture, rural development,
• institution building
• Based on EU cohesion funds model
• Association Agreement implementation
• Institutional capacity building
• Reforms through increased levels of funding based on political
commitment

17. FUNDING
OPPORTUNITIES
DIRECT FUNDING (next sheet)
Erasmus
Neighbourhood investment facility
EIDHR
Cross border cooperation
Horizon 2020
Culture programme

18. EU-Ukraine – A European
Agenda for Reform
The 23 June Foreign Affairs Council agreement to establish a Common Security
and Defence Policy mission to assist Ukraine in the field of civilian security sector
reform, including police and rule of law.
The new “State Building Contract” programme signed on 13 May, worth €355
million, plus €10 million to support civil society, which will help the government
of Ukraine to address short-term economic stabilisation needs and implement
governance reforms in order to promote inclusive socio-economic development.
The approval of an emergency Macro-Financial Assistance (MFA) loan programme
for Ukraine of up to €1 billion. It complemented an existing MFA package of up to
€610 million, bringing the total EU assistance under this financial instrument to
€1.61 billion.

19. EU-Ukraine – A European
Agenda for Reform
The disbursements under the two MFA programmes totalled €600 million as
of 17 June.
Autonomous trade measures granted by the EU to Ukraine on the elimination
or reduction of customs duties on a large number of goods originating in
Ukraine – which is in force since 23 April, worth nearly €500 million per year
in tariff reductions.
The signature of the Memorandum of Understanding enabling gas flows from
Slovakia to Ukraine which was an important first step to diversify Ukraine’s
sources of gas supply.

20. EC Documents
• http://ec.europa.eu/commission_2010-2014/fule/docs/ukraine/a_european_agenda_for_reform.pdf
• http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/145789.pdf
• http://eeas.europa.eu/eastern/docs/eap_vilnius_ppt_201113_en.pdf
• http://eeas.europa.eu/eastern/platforms/docs/work_programme_2014_2017_platform1_en.pdf
• http://eeas.europa.eu/eastern/docs/eap_vilnius_ppt_201113_en.pdf
• http://www.eeas.europa.eu/statements/docs/2014/140612_01_en.pdf
• http://www.eeas.europa.eu/ukraine/
• http://www.eeas.europa.eu/statements/docs/2014/140514_02_en.pdf
• http://www.eeas.europa.eu/statements/docs/2014/140514_02_en.pdf
• http://www.eeas.europa.eu/statements/docs/2014/140514_02_en.pdf
• http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/145218.pdf
• http://www.eeas.europa.eu/csdp/missions-and-operations/euam-ukraine/press-releases/index_en.htm
• http://eeas.europa.eu/eastern/platforms/140228_calendar_multilateral_events_eap_2014_en.pdf
• http://eeas.europa.eu/eastern/initiatives/index_en.htm
• http://eeas.europa.eu/eastern/platforms/docs/work_programme_2014_2017_platform2_en.pdf
• http://eeas.europa.eu/eastern/platforms/docs/work_programme_2014_2017_platform1_en.pdf
• http://eeas.europa.eu/eastern/docs/index_en.htm
• http://eeas.europa.eu/eastern/platforms/docs/work_programme_2014_2017_platform3_en.pdf
• http://eeas.europa.eu/eastern/platforms/index_en.htm
• http://eeas.europa.eu/eastern/platforms/docs/work_programme_2014_2017_platform4_en.pdf

21. HUDSON FINANCIAL INCENTIVES
Management
JOOST.HOLLEMAN@HUDSON.COM
Financing & Grants
WILBERT.VANDERVLIET@HUDSON.COM
EDWIN.AELBERTS@HUDSON.COM
PAUL.MUNTERS@HUDSON.COM
MONIQUE.VANDERVOORT@HUDSON.COM
ALEX.YURCHENCO@HUDSON.COM

22. Joost.Holleman@hudson.com
@joostholleman
November 2014