Since the beginning of the full-scale war, Ukraine’s State Budget expenditures have increased, which was vital for effective resistance to the aggressor. While military expenditures are financed by domestic resources, Ukraine counts on the support of international partners to finance social and humanitarian needs. No country can face challenges of this scale alone.

Since the beginning of the full-scale war, external budget support has reached more than USD 100 billion:

• USD 31.1 billion in 2022;
• USD 42.5 billion in 2023;
• USD 27.2 billion in 2024 (as of November 14).

The largest providers of budgetary assistance for this period are:

• EU – USD 40.5 billion;
• The US – USD 28.2 billion;
• IMF – USD 11.4 billion;
• Japan – USD 6.3 billion;
• Canada – USD 5.4 billion.

The top five partners in terms of financial support provided more than 90% of all funds raised.

The Ministry of Finance of Ukraine attracted USD 33.7 billion or more than 33% of the total amount to the State Budget in the form of grants. Every third dollar was provided by the partners on a non-refundable basis. This made it possible to maintain budget liquidity without increasing the debt burden.

Ukraine received the most funds in the form of grants from the United States. The European Union is the second largest donor in terms of grant funds – USD 2.3 billion. Other countries that provided significant support on a non-refundable basis included Germany (USD 1.4 billion), Japan (USD 955 million), and Norway (USD 506 million).

The rest of the external financing was provided to Ukraine on concessional terms. In particular, the financial assistance from the EU received in 2023 provides for compensation of loan servicing costs by EU countries. The EUR 50 billion Ukraine Facility for 2024-2027 includes about EUR 2 billion to cover the interest on the EU loan.

Ukraine and the IMF have developed a unique cooperation program for a country at war – a 4-year Extended Fund Facility worth USD 15.6 billion. The program is part of the overall package of international support for Ukraine, which currently amounts to about USD 151 billion. Thus, the continuation of the cooperation program with the IMF and its successful reviews are an important signal to all international partners that the financial situation in Ukraine is under control, and Ukraine continues to take measures to maintain financial stability in cooperation with IMF staff. This helps to mobilize additional concessional and grant financing from other donors.

Recently, the IMF Executive Board revised the policy of additional charges, which reduces the cost of borrowing for IMF member states. For Ukraine, the cost of borrowing from the IMF will decrease by about 38-39%.

Most of the funds from Japan were raised through World Bank projects, so they were provided on the Bank’s terms. Starting in 2024, World Bank loans are provided for at least 30 years with a 10-year grace period.

At the same time, Japan is currently the only country that allows for interest capitalization. The interest is added to the principal amount of the loan so that it is calculated as part of this amount in the future. For Ukraine, this is extremely important to reduce the debt burden in the context of the ongoing large-scale military aggression by russia.

The funds from Canada are also concessional in nature: the term is 10 years and the interest rate is 1.5% per annum. The grace period is 4.5 years from the date of receipt of the funds.

International partners who have provided budget support to Ukraine since February 2022:

The significant amount of assistance, as well as the grant and concessional terms of this aid, are evidence of trust and readiness to stand by Ukraine in a time of significant challenges.

The Ministry of Finance of Ukraine continues to seek new mechanisms for mobilizing critical financial resources in close cooperation with its partners. In particular, the G7 recently reached a consensus to provide Ukraine with loans of about USD 50 billion under the ERA. The loans will be serviced and repaid from future revenues from frozen russian assets.