Ukraine and the International Monetary Fund have reached staff-level agreement on a new Extended Fund Facility (EFF) program with potential access of about USD 8.1 billion over 48 months. The arrangement is designed to replace the current IMF program and provide a stable anchor for Ukraine’s macroeconomic policy, debt restructuring and reform agenda in the second phase of the war-time economy.
The agreement still requires approval by the IMF Executive Board, which will consider the program once Ukraine completes a set of prior actions and donors confirm adequate financing assurances. For the Government and the National Bank, the new EFF is positioned as a cornerstone for cooperation with international partners and as a platform for mobilising large-scale concessional and grant-like funding in the coming years.
Key parameters of the new EFF
The program provides access to SDR 5.94 billion (around USD 8.1 billion) over four years. Disbursements will be linked to quarterly and semi-annual reviews that assess macroeconomic performance and progress on structural benchmarks. The policy package is built around several pillars: prudent fiscal policy, tight but flexible monetary policy, and continued reforms of public administration, state-owned enterprises and the financial sector.
On the fiscal side, the authorities commit to adopting a 2026 state budget consistent with the program framework, prioritising defence and critical social spending while avoiding inefficient expenditures and new tax exemptions. Domestic revenue mobilisation – including better tax administration, tackling informality and expanding taxation of income earned via digital platforms – is expected to gradually increase Ukraine’s own contribution to budget financing.
Closing a USD 136.5 billion financing gap
The EFF is also explicitly designed to catalyse external support. Under the baseline scenario, Ukraine’s total gross financing needs for 2026–29 are estimated at about USD 136.5 billion, with a residual gap of roughly USD 63 billion in 2026–27 after taking into account existing commitments. The IMF program is expected to unlock additional packages from the European Union, G7 countries and other partners, including instruments that may be backed by frozen Russian assets.
For donors, the presence of an IMF program provides assurance that macroeconomic policies, budget execution and debt operations follow a coherent, jointly agreed framework. For Ukraine, this anchor is crucial to avoid liquidity strains, maintain exchange-rate stability and continue rebuilding reserves while the war and reconstruction needs remain unpredictable.
Reforms, risks and investor perspective
Beyond pure financing, the EFF locks in a medium-term reform agenda. Priorities include restoring debt sustainability through the implementation of the debt strategy, strengthening governance and anti-corruption institutions, improving the management of state-owned enterprises and banks, and modernising regulation in areas such as energy and financial markets. Successful reviews will signal progress on these fronts and can improve Ukraine’s risk profile for private investors.
Risks, however, remain exceptionally high. The program explicitly recognises uncertainty around the duration and intensity of the war, as well as the timing and scale of donor flows. Each review will therefore include a recalibration of assumptions and targets, depending on the security situation and the pace of reconstruction.
What this means for investors and lenders
- Sovereign debt holders. A new EFF with clear debt-sustainability targets provides an important reference point for Ukraine’s ongoing and future debt operations, including restructuring of Eurobonds and official claims.
- Banks and IFIs. The program reinforces macro-financial stability and should support continued engagement by multilateral and bilateral lenders in guarantees, trade-finance lines and project finance.
- Corporate and infrastructure investors. Predictable macro policy, together with large-scale donor funding tied to reforms, improves the environment for long-term projects in energy, logistics, municipal infrastructure and defence-adjacent industries.
If the Executive Board approves the new EFF and donors deliver on their commitments, Ukraine will gain a clearer financial roadmap for 2026–29 – one that combines IMF oversight, substantial external support and a structured path for rebuilding the economy during and after the war.
