International Monetary Fund Managing Director Kristalina Georgieva on Thursday said she expected to ask the IMF's executive board to approve a new $8.1 billion lending program for Ukraine in a matter of weeks, underscoring the importance of shoring up funding for the war-torn country.
Georgieva's remarks came after she arrived in Kyiv for the first time since 2023 to meet with top officials and inspect energy infrastructure damaged in Russian strikes as Ukraine nears the fourth anniversary of Moscow's full-scale invasion on Feb. 24.
Her visit to Ukraine was kept secret until her arrival in the capital due to security concerns.
Speaking after meetings with Ukrainian President Volodymyr Zelenskyy and other officials, Georgieva said much had changed in Ukraine since November, when a preliminary agreement was reached on the four-year lending program, but the thrust of its requirements would remain the same.
The program is contingent on several actions by Ukraine, including shoring up donor financing, enacting a 2026 budget and broadening the tax base.
"I'm here to see how the country is doing in these unusually harsh times, because I want to make sure that what was agreed in November is implementable as it was agreed," Georgieva told Reuters. "We recognize that the direction to travel remains the same (but) the way we take these steps, we have to calibrate carefully."
National Bank of Ukraine Governor Andriy Pyshnyi greeted Georgieva in front of St. Michael's Golden-Domed Monastery in a square in central Kyiv, where burnt-out Russian tanks are on display. Together, they placed flowers at a memorial wall bearing portraits of thousands of Ukrainian soldiers killed while fighting Russia.
The IMF chief met with Pyshnyi, Prime Minister Yulia Svyrydenko and Finance Minister Serhii Marchenko, before meeting with Zelenskyy later in the day. She was also due to meet with business executives during the one-day visit.
Georgieva, who has close family ties to Ukraine, last visited the country in February 2023. Her brother was in Kharkiv, the second-largest city, when Russia invaded.
Following the meetings, Georgieva said she told the Ukrainian authorities that they had to press forward with removing a VAT exemption for consumer goods that has run into domestic resistance. But she said the IMF would require only that the measure was introduced in parliament, not that it was already passed, before the new program could be approved.
IMF spokesperson Julie Kozack told reporters in Washington that they are in the final stages of discussions with international donors as they seek to secure all of the necessary financing assurances. She said the IMF was hopeful a board meeting could happen in February.
Georgieva's goal, she said, was to meet with Ukrainian authorities and underscore the IMF's support for continued reforms.
"She wants to understand the key issues as they see it... on the ground," Kozack said, adding that Georgieva also aimed to help coordinate and catalyze financial support for Ukraine from the international community.
Approval of the funding is critical, since it will unlock additional external investments needed to close Ukraine's financing gaps, which the IMF has calculated at around $136.5 billion for the period through 2029, given the war.
"On the VAT exemptions, we made it very clear that this has to happen. That we cannot possibly have the Ukrainian economy lingering between market economy and non-market economy," Georgieva said. "We have to move it forward and the question is not whether. The question is how we do it, how we get the level of support from the parliament."
Georgieva said she explained to Ukrainian officials that this was a must-have requirement. "I was very clear. You know, this, you cannot touch it. You need it for you. You need it for EU accession. You need it to attract the private sector to make the business environment more conducive," she said.
Georgieva said the IMF would assess which measures were easily implemented and which needed to be "calibrated" more carefully. On the VAT exemption, she said the Fund was discussing giving Ukraine a year to drum up support in parliament for passage of the measure, which has proven controversial.
Her visit comes a day after Zelenskyy declared a state of emergency in the energy sector to accelerate work on power supplies disrupted by Russian attacks on infrastructure. Repairs to thousands of apartment blocks have been complicated by frigid weather, with nighttime temperatures dipping close to -20 Celsius (minus 4 Fahrenheit).
Svyrydenko welcomed Georgieva's continued support and personal engagement in a posting on the social media platform X, calling her visit "an important signal of support for Ukraine."
"Her visit comes at a particularly difficult moment for our energy sector, amid unprecedented Russian attacks and the coldest winter in 20 years," Svyrydenko said, noting that they had gone together to inspect damage from Russian strikes at one of Kyiv's major energy facilities.
The war has hit the Ukrainian economy hard, with the country slated to spend the bulk of state revenues – 2.8 trillion hryvnias or around 27.2% of GDP – to fund defense efforts in 2026. While Ukrainian authorities have agreed to accelerate efforts to prevent tax evasion and avoidance, the IMF is not counting on higher revenues until 2027, an IMF official said.
Ukraine passed a big milestone toward closing financing gaps last month when European Union leaders agreed to lend it 90 billion euros ($105 billion) for two years.
Ukraine must only service the loan if Russia pays reparations after the war ends, which means it won't pose a burden on the budget. It also completed the restructuring of $2.6 billion in growth-linked debt, easing pressure on Kyiv, which had warned that the instruments could have cost as much as $20 billion through 2041.
The new IMF program will replace its current four-year $15.5 billion program, of which some $10.6 billion has been disbursed, which had assumed the war would end in 2025.
The new preliminary agreement assumes the war will end this year, but includes a "downside scenario" that the war winds down slowly and does not end until 2028.
