The International Monetary Fund (IMF) says it has reached an agreement with Ukraine for $15.6 billion (£12.8 billion) in funding.
The institution’s first loan to a country at war is expected to be approved in the next few weeks.
It would also be one of the largest financial packages Ukraine has received since the Russian invasion.
The IMF recently changed a rule to allow lending to countries facing “particularly high uncertainty”.
“Russia’s invasion of Ukraine continues to have devastating effects on the economy:
activity has fallen by 30% by 2022, most capital reserves have been destroyed and poverty levels have skyrocketed,” IMF Director Gavin Gray said in a statement. “The program has been tailored to the new fund’s lending policy under exceptionally high uncertainty and donors, including the G7 and the EU, expect strong funding guarantees from Donors.”
Mr Gray also said the deal would “mobilize large-scale concessional funding” for Ukraine from international donors and partners, but gave no further details. The funding still needs to be approved by the IMF Executive Board.
The IMF predicts that the Ukrainian economy will contract slightly or grow this year.
Prime Minister of Ukraine Denys Shmyhal said the funding will help the country “finance all important expenditures, ensure macroeconomic stability and strengthen our interactions with international partners.” other”.
US Treasury Secretary Janet Yellen, who made a surprise visit to Ukraine last month, said:
“An ambitious and tailored IMF program is needed to support Ukraine’s reform efforts.”
The United States is the largest shareholder of the IMF and the largest contributor to Ukraine in terms of spending amounts. Earlier this year, President Joe Biden announced nearly half a billion dollars in additional military aid to Ukraine. This is more than the $112 billion Congress spent in 2022 alone.
Military aid, which accounts for more than half of US spending on Ukraine, pays for drones, tanks, missiles and other weapons systems as well as training, logistics, and intelligence support. .
Money has continued to flow into the conflict from around the world since Russia invaded Ukraine last February.
Last week, the IMF said its board had approved a rule change to allow funding for countries facing “particularly high uncertainty”. Without mentioning Ukraine, he said the measure applies to countries experiencing “exogenous shocks that are beyond the control of national authorities and beyond the reach of their economic policies.” .”