MECHANISMS FOR FINANCING THE «GREEN» TRANSFORMATION OF UKRAINE: THE ROLE OF EUROPEAN FUNDS IN POST-WAR RECOVERY

Abstract

The article examines the key mechanisms for financing the green transformation of Ukraine’s economy in the context of post-war recovery and integration into the European economic space. Particular attention is paid to the role of European financial instruments and funds in supporting the transition to a low-carbon development model, strengthening energy security, and modernizing critical infrastructure. The study analyzes the main directions of financial support provided through European Union instruments, international financial institutions, and post-war reconstruction programs. Special emphasis is placed on the potential of such mechanisms to promote the development of renewable energy, decarbonization of industrial sectors, improvement of energy efficiency, and implementation of innovative environmental technologies. The paper also highlights the importance of combining grant financing, credit resources, guarantees, and blended finance instruments to ensure the effectiveness of investment processes in the green sector. It is established that the successful attraction and utilization of European financial resources require the formation of an institutionally capable management system, transparency in the allocation of funds, and the alignment of national legislation with European Union standards. Furthermore, the development of public-private partnerships is identified as a crucial factor in scaling investment projects and ensuring long-term sustainability. The study further substantiates the strategic importance of the Ukraine Facility and the Ukraine Investment Framework as core mechanisms for mobilizing long-term capital, mitigating investment risks, and channeling financial resources into climate-oriented reconstruction projects. Considerable attention is also devoted to the role of international development finance institutions in providing guarantees, technical assistance, and blended finance solutions aimed at crowding in private investment. In addition, the paper outlines the relevance of developing national sustainable finance instruments, including green bonds, ESG-based lending, climate funds, and sustainability reporting practices, as well as the gradual incorporation of EU regulatory approaches such as the EU Taxonomy, the European Green Bond Standard, and European sustainability disclosure requirements into Ukraine’s financial and investment architecture. The study concludes that European financial instruments play a decisive role in accelerating Ukraine’s green transformation, enhancing its energy independence, and building a resilient and sustainable economic model in the post-war period.