In 2023, the State Budget received USD 42.6 billion of external financing.
Grants provided on a non-refundable basis amounted to USD 11.5 billion, about 27% of the total amount of financing. At the same time, Ukraine received all loans on concessional terms.
“USD 42.6 billion, a record amount of foreign aid, is the result of the crucial work of the teams of the Ministry of Finance of Ukraine, the Government of Ukraine and international partners. By joint efforts, we succeeded in raising the necessary amount of funds to cover all priority expenditures. These include old-age social payments, salaries for employees of the education and healthcare sectors, social protection, and humanitarian support. The rhythmic assistance allowed us not only to fully execute the budget of Ukraine, but also to timely cover all planned expenditures. I am grateful to all our partners for their efforts to maintain our financial stability. However, the challenges posed by the war remain, and we continue to work with donors to meet Ukraine’s budgetary needs next year and to contribute to the full economic recovery of the country,” said Minister of Finance of Ukraine Sergii Marchenko.
The largest donors of financial aid in 2023:
The European Union has provided Ukraine with the largest amount of financial assistance under the large-scale Macro-Financial Assistance (MFA+) for 2023. The total amount of concessional funds reached EUR 18 billion. The loan has a maturity of 35 years, and the EU countries will compensate for interest and other debt service payments instead of Ukraine.
The support of the United States was extremely significant, including through grants, which allowed us not to increase the debt burden on the State Budget. Ukraine received USD 11 billion through the World Bank’s Public Expenditures for Administrative Capacity Endurance (PEACE in Ukraine) project.
In March 2023, the IMF Executive Board made a historic decision to launch a 4-year Extended Fund Facility arrangement for Ukraine in times of war. The total amount of the program is about USD 15.6 billion, of which Ukraine has received about USD 4.5 billion this year.
“In the 9 months of the IMF program’s operation, we have already successfully passed two reviews. Ukraine has performed 17 IMF structural benchmarks, 11 of which relate to fiscal policy and the financial sector. In particular, legislative initiatives to improve the Budget Code, strengthen tax policy, and manage public debt. We continue to work on the implementation of the jointly identified reforms and hope that this will result in further attraction of the necessary external financing for the country’s urgent needs in the context of the war. As part of the IMF program, international partners have provided assurances of financial support for Ukraine in the amount of about USD 122 billion over 2023-2027,” said Deputy Minister of Finance of Ukraine Olga Zykova.
The need for external financing for the next year reaches USD 37.3 billion, which has been verified by the IMF.
Japan has provided Ukraine with funds under five World Bank projects: USD 1.5 billion – Development Policy Loan, USD 1 billion loan – PEACE in Ukraine, USD 900 million loan – Investing in Social Protection for Inclusion, Resilience, and Efficiency (INSPIRE), USD 180 million grant – Ukraine Agriculture Recovery Inclusive Support Emergency (ARISE), and USD 52.4 million grant – Housing Repair for People’s Empowerment Project (HOPE).
Canada has allocated CAD 2.4 billion to the State Budget of Ukraine through the IMF’s Administrated Account mechanism. The concessional financing was attracted for 10 years, with an interest rate of 1.5% per annum.
The UK guarantees are part of additional financing under the World Bank’s PEACE in Ukraine project. The maturity is 19 years with a 5-year grace period.
Funds from the World Bank were channeled to develop Ukraine’s agriculture and strengthen the healthcare system.
In addition, the World Bank developed projects and mechanisms that allowed Ukraine to mobilize financial resources from other donors, namely the United States, Japan, the United Kingdom, Norway, Spain, Finland, Switzerland, Ireland, Belgium, Iceland, Estonia, and others. Since the beginning of the full-scale war, the World Bank has created 7 projects to support Ukraine: PEACE in Ukraine, HOPE, HEAL Ukraine, RELINC, Re-Power, INSPIRE, ARISE.
All funds from international partners were allocated to the priority expenditures of the State Budget. The Ministry of Finance cooperates closely with donors to ensure that every dollar of financial aid is used for its intended purpose. The trust of our partners is a key asset for continued cooperation.
In total, since the beginning of the full-scale war, international partners have provided USD 73.7 billion to Ukraine.