A Two-Pronged Approach: How Much Funding Could Ukraine Receive from Foreign Partners in Exchange for Reforms?
3 April 16:09
ANALYSIS FROM 
Ukraine needs to secure an additional $46.5 billion in external financing to more or less comfortably cover this year’s budgetary needs. "Komersant Ukrainian" investigated how to obtain these funds.
“Without help from partners, problems with pension, social assistance, and salary payments are possible in just two months”—this is roughly the forecast voiced by one of the members of parliament that Ukrainians have been hearing these days. This statement came against the backdrop of discouraging news from Brussels regarding the lack of a decision on granting Ukraine a €90 billion loan, a fact confirmed during this week’s visit to Kyiv by EU Foreign Affairs Chief Kaja Kallas. All of this together could lead some to conclude that Ukraine’s financial problems are the result of the helplessness of its European partners. That this is not the case is what the Europeans themselves have tried to explain in recent days—using a concrete example and specific figures.
European Commissioner for Enlargement Marta Kos sent a letter to the leadership of the Ukrainian parliament, in which she reminded them that it is the members of parliament who can help the country improve its financial situation by passing 11 specific laws, a list of which was also attached to the letter.
“These reforms contribute to Ukraine’s progress toward membership and are part of the Ukraine Plan. Their effective and prompt adoption will allow Ukraine to attract up to €4 billion in funding,” the Commissioner noted.
She explained that all these draft laws pertain to Ukraine’s overdue commitments from last year, have been reviewed by the European Commission, and are ready for adoption in a version that has already been reviewed by the relevant parliamentary committees. Furthermore, some of these draft laws require prompt adoption by parliament to ensure that the allocated funds are not permanently lost. Although, for the sake of objectivity, it is worth noting that among the commitments agreed upon with foreign partners, there are quite a few that other representatives of the Ukrainian government can and should join in fulfilling—to avoid problems with the payment of pensions, social assistance, and salaries.
Budgetary Needs
The total dependence of this year’s Ukrainian budget on foreign financing is estimated, as is well known, at $52 billion. $5.5 billion has already been secured, leaving an unmet need of $46.5 billion. Viktoria Klimchuk, an analyst at the Center for Public Finance and Public Administration Analysis at the Kyiv School of Economics, provided further details.
“According to Ukraine’s Law on the State Budget for 2026, the state budget deficit is projected at 1.9 trillion UAH. External financing is expected to play a key role in funding this deficit and supporting macroeconomic and fiscal stability. The government expects to receive 2.1 trillion UAH (46.5 billion USD) in loans from foreign partners to finance the general fund deficit of the state budget. Specifically, the government expects to receive a loan of 456.3 billion UAH from the European Union under the Ukraine Facility program, 516.8 billion UAH from the governments of the United States, Japan, and Canada under the ERA mechanism—guaranteed by proceeds from frozen Russian assets—103.6 billion UAH from the IMF, 106.1 billion UAH from the World Bank, and 826.9 billion UAH from other creditors. Thus, Ukraine does indeed rely heavily on external support and, as of now, has sufficient agreements in place to secure all the necessary funds to finance the budget deficit,” the expert notes.
One of the key words here is “agreements,” since the actual receipt of significant sums that could support the Ukrainian budget remains in question. And in this case, we are not only talking about the €90 billion aid package from the European Union, which has been blocked due to the well-known position of the current Hungarian government. The fate of substantial sums of money will also depend on the decisions to be made in Ukraine—in government offices and in the parliament’s session hall.
Reform Indicators
The RRR4U (Resilience, Reconstruction, and Relief for Ukraine) consortium has been active in Ukraine for quite some time; it includes the Center for Economic Strategy, the Institute for Economic Research and Policy Consulting, the Institute for Analytics and Advocacy, and the DiXi Group. For over two years, these four expert organizations of Ukrainian civil society have been preparing monthly monitoring reports on the implementation of the IMF program conditions and Ukraine’s Plan under the Ukraine Facility. A few days ago, the latest such monitoring report was published. And it can be noted that it contains quite a few assessments with a “no” rating: not implemented, not adopted, not considered…
One of the general conclusions of the monitoring report: unmet structural benchmarks and unfulfilled indicators continue to accumulate, creating risks of failing to receive significant amounts of financial support. For example, the Verkhovna Rada has not yet adopted any of the four laws necessary to receive $3.35 billion in funds from the World Bank. Oleksandra Betliy, a leading research fellowat the Institute for Economic Research and Policy Consulting, continues.
“When it comes to the World Bank, unfortunately, nothing has changed. There were four commitments, there are still four, nothing has been fulfilled, and so the picture is bleak. We had hoped that the situation would be better with the IMF program, but again, that did not happen. On the positive side, the $1.5 billion from the first tranche, received in early March, supported our financial situation. But that’s where the good news effectively ends,” the expert notes.
According to monitoring data, Ukraine was supposed to meet three structural benchmarks in March, and all of them remain unmet so far. For example, the “strengthening of the process for nominating members of state-owned banks’ supervisory boards” did not take place, even though this was supposed to be done back in February. There was a delay in appointing the head of the State Customs Service. However, the relevant selection committee has already identified two finalists, whose nominations have been submitted to the Ministry of Finance for consideration. They also failed to meet the deadline for adopting tax changes. Three draft laws developed by the Ministry of Finance—on the taxation of digital platforms, the taxation of international parcels, and the extension of the military levy—have only been approved by the Cabinet of Ministers. The ball is now back in Parliament’s court, and this part of the legislative process will certainly not be easy. A working group of the parliamentary finance committee has already reviewed these government bills. Committee Chair Danylo Getmantsev assessed the results as follows:
“As for the content—yes, the content will change somewhat for the better. But without watering down the essence… I am convinced that these bills are desperately needed by the country. And responsible, patriotic deputies will support them. And we have a majority of responsible and patriotic deputies.”
“Is that really the case?” The results of the parliamentary vote will provide the answer. And this goes beyond just these three “IMF bills.” The list of what remains undone—and not just by lawmakers—is long.
For example, Ukraine is critically behind in meeting the indicators under the Ukraine Facility program. Alona Korogod from the DiXi Group think tank cites the following data:
“By the end of 2025, Ukraine had failed to meet 14 indicators totaling over 3.9 billion euros, with the largest portion—2.5 billion euros—accounting for the fourth quarter alone. This trend continues into 2026. Of the eight indicators that were supposed to be met by the end of the first quarter, only one has actually been met. Meanwhile, seven indicators remain unmet. And this means a further accumulation of the risk of losing funding.”
Moreover, according to the expert, as early as July—due to the failure to meet one of the indicators for the first quarter of 2025 regarding the expansion of the High Anti-Corruption Court’s staff—Ukraine could permanently lose 300 million euros.
Author: Serhiy Vasylevych
