Ukraine unlocks US$1.5 billion in IMF funding as board approves US$8.1 billion loan

WASHINGTON: The International Monetary Fund's executive board has approved a US$8.1 billion lending agreement for Ukraine, unlocking immediate access to around US$1.5 billion, the fund said on Thursday (Feb 26), days after the country marked four years since Russia's invasion.

The 48-month arrangement replaces an earlier facility, and is expected to support Kyiv as authorities push to maintain economic stability and the war with Russia enters a fifth year.

International Monetary Fund staff and Ukrainian authorities had reached a staff-level deal on this funding in November.

But the programme was contingent upon securing financing assurances and enacting a budget, among other elements.

"The overarching goals of the authorities' new programme are to continue anchoring economic and financial stability, restore debt sustainability" and advance reforms that will help with post-war recovery and support Ukraine's aim for accession to the European Union, said the IMF.

"Ukraine and its people have weathered a long and devastating war for over four years with remarkable resilience," IMF Managing Director Kristalina Georgieva added in a statement.

Ukraine's Prime Minister Yulia Svyrydenko said in a statement posted on Facebook that the initial funds would be directed to finance the budget deficit and support economic stability.

"It is very important for us that in the fifth year of a full-scale war, against the background of systemic attacks on the energy sector, Ukraine has guaranteed international financial support from partners and a resource for the stable operation of the state," she said.

Georgieva added that the new arrangement "aims to preserve the hard-won macroeconomic and financial stability" as well as to extend and deepen structural reforms as the war continues.

IMF spokeswoman Julie Kozack said this month that Ukraine had met all conditions required for board approval for the deal.

Hundreds of thousands of people have died since Russia invaded its neighbor on Feb 24, 2022, unleashing the deadliest war on European soil since World War II.

The IMF has made more than US$10 billion - not including Thursday's new US$8.1 billion programme - available to Ukraine since the start of the war.

Ukrainian President Volodymyr Zelenskyy said on Thursday that he expected the next round of talks to end the war with Russia in early March in Abu Dhabi.