IMF Approves Over $8 Billion Funding Program for Ukraine

The Board of Directors of the International Monetary Fund on February 26 approved a new four-year Extended Fund Facility (EFF) program for Ukraine worth USD 8.1 billion.

This was reported by Radio Svoboda.

“The approval of the Extended Fund Facility (EFF) program is expected to mobilize substantial concessional financing from international donors and Ukraine’s partners, which will help address Ukraine’s balance of payments needs, achieve medium-term external viability, and restore debt sustainability on a forward-looking basis,” the IMF said in a statement on the decision.

Commenting on the Fund’s decision in the early hours of February 27, Ukraine’s Prime Minister Yuliya Svyrydenko noted that Ukraine will soon receive the first tranche of about USD 1.5 billion, which will be used “to finance the budget deficit and support macro-financial stability.”

“The program supported by the IMF is part of a broader financial framework designed to cover the projected budget deficit of USD 136.5 billion over the next four years. It provides for the continuation of reforms that have ensured macroeconomic and financial stability in previous years,” the head of government said.

Svyrydenko emphasized that the IMF’s decision paves the way for “financing from the EU, as well as funding from G7 countries, international financial institutions, and a reduction of debt service on official debt through a debt relief mechanism.”

Earlier in February, Prime Minister Yuliya Svyrydenko reported that the International Monetary Fund (IMF) had simplified the agreements with Ukraine reached in November — specifically, it revised previous measures and structural benchmarks after numerous discussions and consultations, including direct talks with Managing Director Kristalina Georgieva.

According to the head of government, Ukraine and the IMF also reached an understanding on the taxation of individual entrepreneurs. In particular, they agreed to raise the VAT threshold for individual entrepreneurs to UAH 4 million. “This is the highest VAT threshold for goods in Europe,” the prime minister explained. She added that there are currently 257,000 individual entrepreneurs in the country with a threshold above UAH 4 million, meaning the changes will affect two-thirds of all individual entrepreneurs.

Previously, the introduction of this rule was discussed for January 1, 2027, but the effective date is still under discussion.