Ukraine will soon receive $841 million in budget support from the World Bank, backed by guarantees from the government of Canada, Prime Minister Serhiy Koretskyi announced.
The funding will come through the PEACE in Ukraine project. Koretskyi said the money would be directed to reimburse state budget expenditures on pension payments, calling the support extremely important and timely given the budget deficit and the imbalance in public finances.
Spending Already Being Curbed
The announcement follows a warning from Finance Minister Serhiy Marchenko, who confirmed on 10 September that Ukraine had begun forcibly restricting state spending because of delays in international financial aid.
Ukraine's defence budget deficit has reached $27 billion. Koretskyi has cited the rising cost of the war as one of the reasons behind the shortfall.
On 1 September, the prime minister said the government had found 70 billion hryvnias in budget savings, which would be redirected to defence spending.
Budget Pressure Mounts
Roksolana Pidlasa, who chairs the Verkhovna Rada's budget committee, has said the war has become so costly that Ukraine can no longer fully cover its share of the expenses on its own, as it had been able to do previously. At the same time, budget revenues are falling because Russia has been targeting a number of Ukrainian industries with attacks.
What the PEACE Project Does
The World Bank's PEACE in Ukraine program (Public Expenditures for Administrative Capacity Endurance) has been one of the main channels through which Western governments have funneled emergency budget support to Kyiv since Russia's full-scale invasion in 2022, guaranteeing loans so the World Bank can keep lending despite the war. Canada has been among the countries backing these guarantees, alongside other G7 members, as part of broader international efforts to keep Ukraine's public finances functioning while the country diverts an increasing share of its own resources to defence.
The World Bank is a Washington-based international financial institution that provides loans and grants to governments, primarily to fund development and, in Ukraine's case, to help sustain essential public services such as pensions during wartime.
