On Friday, the International Monetary Fund (IMF) announced that it has approved a $15.6 billion loan program for Ukraine, as part of a global package worth $115 billion to support the country’s economy in its fight against Russia’s invasion that has been going on for over a year.
The four-year Extended Fund Facility (EFF) loan is the first major conventional financing program that the IMF has approved for a country that is involved in a large-scale war. The loan approval clears the way for an immediate payment of approximately $2.7 billion to Kyiv. In addition, Ukraine is required to implement ambitious reforms, particularly in the energy sector.
The IMF stated that the loan’s size is meant to signal the global community’s commitment to continue supporting Ukraine in its war efforts. The loan is also expected to unlock about $100 billion worth of additional international support for Ukraine. Ukraine must meet certain conditions over the next two years, including strengthening anticorruption efforts, promoting central bank independence, and avoiding steps that could erode tax revenue.
The IMF warned that the program faced “exceptionally high” risks, and its success depended on the size, composition, and timing of external financing to help close fiscal and external financing gaps and restore Ukraine’s debt sustainability.
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