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No indication of foreign funds misuse by Ukraine’s infrastructure agency, EU Delegation says

by The Kyiv Independent news desk July 7, 2024 7:24 PM 3 min read
Mustafa Nayyem, the former head of Ukraine's agency for Restoration and Infrastructure Development in a photo on June 28, 2020. (Mustafa Nayyem/Facebook)
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There is no indication that Ukraine's infrastructure agency has misused foreign funds, the EU Delegation to Ukraine told the Kyiv Independent on July 7.

Ukraine's Finance Ministry accused the  State Agency for Reconstruction and Development of Infrastructure of misusing Western funds in a comment to the Ukrainian online newspaper Ekonomichna Pravda, which was published earlier on July 5.

The ministry claimed that the EU Delegation to Ukraine was unhappy with the agency failing to use 150 million euros allocated by the European Commission.

Mustafa Nayyem, who previously headed a state infrastructure agency, on July 5 denied the accusations that the agency had misused foreign partners' funds.

"The Ministry of Finance went public with a number of strange comments," Nayyem told Ekonomichna Pravda. "Since this is the official position of the state body, which has manipulated facts and figures and called into question the work of the agency's entire team, I consider it necessary to provide an explanation."

According to Nayyem, the Finance Ministry said the agency had received UAH 7.8 billion ($192.3 million) but was yet to spend any of the money. Nayyem said, however, that there was a mistake in the figures, and the total amount of money being discussed was actually UAH 7.6 billion ($187.4 million).

"I am a bit surprised by the Finance Ministry's mistake of Hr 200 million in the official communication regarding the funds of international financial institutions," he said.

"The EU Delegation to Ukraine confirms that in 2023, it has allocated 250 million euros of budget support for Fast Recovery Needs in a variety of sectors. The first disbursement of 150 million euros was made in December 2023, on the basis of Ukraine meeting all conditions linked to this payment," the EU Delegation said in a comment to the Kyiv Independent on July 7.

"Thereafter, the EU Delegation has highlighted on several occasions the importance of a prompt use of these funds for fast recovery projects. Given Ukraine’s massive financial need for recovery assistance, the EU Delegation can only re-iterate the need to swiftly finalize the ongoing internal procedures, thus allowing for the use of the funds of the first payment and the release of the second."

Nayyem resigned as head of the Agency for the Restoration and Development of Infrastructure on June 10 after being prevented from attending the upcoming Ukraine Recovery Conference on June 11-12 in Berlin.

In a lengthy post on Facebook, Nayyem named a series of complaints about the "systemic obstacles" that had limited his ability to do his job, ultimately leading to his decision to resign.

The Financial Times (FT) reported on June 10, citing unnamed Ukrainian and Western officials, that Nayyem's resignation from the agency and other firings and reshuffles strained relations between Kyiv and Western allies and raised concerns about how Ukraine can deal with fixing the country's energy infrastructure as it comes under repeated attacks by Russia.

Former investigative journalist, Nayyem, became a reformist MP and anti-corruption activist in 2014. He was a deputy infrastructure minister from 2021 to 2024 and head of the Agency for the Restoration and Development of Infrastructure from 2023 to 2024. The agency was created to spend Western donors' funds on rebuilding infrastructure destroyed as a result of the war.

Ex-infrastructure agency head denies accusations of misusing Western funds
Ukraine’s Finance Ministry accused the agency of misuse of Western funds in a response to Ukrainian online newspaper Ekonomichna Pravda. Specifically, the ministry claimed that the EU Delegation to Ukraine was unhappy with the agency failing to use the 150 million euros allocated by the European Com…

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