IMF approves $8.1 billion loan for Kiev

The International Monetary Fund (IMF) has approved a new four-year loan for Ukraine, which is currently facing an acute budget deficit. A much larger sum offered by Brussels and backed by EU taxpayers remains blocked by Hungary’s veto.

The IMF has allocated $8.1 billion, with $1.5 billion to be disbursed immediately, the UN financial institution said in a statement published on Friday. The sum would still be insufficient to cover the Ukrainian government’s needs, it admitted.

Kiev will have a budget deficit of $52 billion in 2026 alone, growing to $136.5 billion over four years, according to the fund’s estimates. It expects the gap to be “closed through committed donor support and flow relief from debt operations” and named the EU and the G7 as potential financial donors.

IMF managing director Kristalina Georgieva still warned that the risks “are exceptionally high” and Kiev’s ability to repay depends on the “continued support by the international community,” as well as its “determination in implementing… structural reforms.”

Last month, the fund demanded Ukraine end electricity and heating subsidies. Ukraine is ranked among Europe’s poorest countries, and government support for electricity, heating, and gas have long been crucial for households.

In October, Bloomberg reported, citing sources familiar with the situation, that the IMF had been pressuring Ukraine to devalue its currency, the hryvnia, to secure a new loan.

Meanwhile, a €90 billion ($106 billion) interest-free loan to Ukraine for 2026-2027 promised by Brussels remains blocked due to Hungary’s opposition. Budapest vetoed the plan earlier in February, accusing Kiev of jeopardizing the “security of Hungary’s energy supply” by deliberately blocking the Soviet-era Druzhba oil pipeline.

Hungary and Slovakia also announced plans for a joint probe to examine damage to the pipeline, which went offline in late January. Kiev claimed it was damaged in Russian strikes – accusations Moscow has denied. Both Budapest and Bratislava believe the pipeline is not damaged.