IMF poised to announce $15.6bn lending programme for Ukraine

The IMF is finalising a four-year lending programme worth $15.6bn for Ukraine, with a person close to the talks saying an announcement is “imminent”.

The multilateral lender has been under pressure to pull together a more comprehensive aid package for the country, which has been economically devastated by Russia’s full-scale invasion in February 2022. The person said an announcement would come in a few days.

In a statement released on Wednesday, the IMF affirmed that policy discussions with Ukrainian authorities had taken place in Warsaw, Poland, between March 8-15.

“The discussions between IMF staff and the Ukrainian authorities were productive and very good progress has been made towards agreement on a set of policies that could underpin a fund-supported programme,” said Vahram Stepanyan, the IMF’s resident representative to Ukraine. “Building on this progress, staff and the authorities expect to conclude the discussions in the coming days.”

Olena Bilan, chief economist at Kyiv-based investment bank Dragon Capital, said the new IMF programme is crucial — along with multibillion-dollar financing from other foreign partners including the US and EU — to help Ukraine “bridge its huge budget funding gap created by Russia’s invasion”.

“The government seeks $43bn of external budget support this year, according to latest budget amendments, on top of $32bn in 2022,” Bilan said.

“While the IMF may provide only $4bn to $5bn this year, a fraction of total funding needs, the programme will anchor [the] government’s policies, will demonstrate wide support for Ukraine and thereby will help to ensure sufficient financing from other partners.”

The World Bank has estimated that more than half of the country’s energy infrastructure has been destroyed by Russian attacks, exacerbating the blow to Ukraine’s economy.

The size of the loan had been pegged at between $14bn-$16bn in initial discussions.

The IMF previously granted Ukraine $2.7bn of emergency funding and in December approved a four-month programme for the country aimed at shoring up the economy and preparing it for a significant loan from the fund.

According to figures released on Wednesday by Ukraine’s finance ministry, the country has received about $25bn in budget financing support from the US and EU, by far the largest donors, since Russia launched its full-scale invasion in February 2022.

Ukraine has received more than $38bn in budgetary support from foreign countries and international financial institutions since the onset of the war.


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