Ukraine plans to create a financial buffer of $10.1 billion in case of a negative scenario. It will also divide external financing from the G7 countries under the ERA mechanism, which is allocated at the expense of frozen Russian assets, into three parts.
This is stated in the materials of the updated EFF Extended Fund Facility program with the International Monetary Fund (IMF).
The document states that the authorities have undertaken certain obligations.
"One part will be allocated for budget financing of the current year, the other for preliminary financing of the deficit of the next year, and the third part will constitute conditional financing for a negative scenario," IMF representatives note.
In addition, the program includes receiving $44.1 billion through the ERA mechanism in the period up to the first quarter of 2027 (inclusive, this is the last quarter of the EFF program) for a total announced amount of $50 billion. Of this amount, $1 billion was received last year, and this year it will be $39.4 billion, next year – $2.4 billion, and in 2027 – $1.3 billion.
The baseline scenario also assumes that $8.4 billion of the funds received this year will be considered as advance financing for the budget deficit in the following years: $8.1 billion will be used in 2026 and another $0.3 billion in the first quarter of 2027.
As for the financial buffer in case of a negative scenario, $9.1 billion from this year's ERA revenues and $1 billion from next year's revenues will be allocated to its formation.
However, the updated program provides the following: under the baseline scenario, in which the war ends at the end of this year, external financing to cover the deficit will be needed this year in the amount of $39.8 billion, next year - $20 billion, and in the first quarter of 2027 - $3.1 billion.
And in a negative scenario, in which the war will last until mid-2026, and shocks are expected as early as the second quarter of this year, external financing to cover the deficit will be needed this year in the amount of $48.8 billion, next year - $21 billion, and in the first quarter of 2027 - $7.1 billion.
"To implement sound management of ERA flows, the authorities will rely on the provisions of the Budget Code of Ukraine regarding: (i) allocating sufficient resources for pre-financing and reserves and adhering to the expenditure limits set in the 2025 budget. The authorities have also committed to reviewing any expenditure categories, if necessary, only after consultation with Fund staff," IMF representatives explained.
Earlier, "Apostrophe" reported that Ukraine and the IMF reached an agreement on the seventh review of the Extended Fund Facility (EFF), totaling about $15.5 billion.