Ukraine plans to divide the external funding received from G7 countries under the ERA mechanism into three separate parts. These funds, allocated from frozen Russian assets, will be used to cover various financial needs of the state. In particular, one part will be directed towards budget financing for the current year, another will be for pre-financing the deficit for the next year, and the third part is intended to create a financial buffer in case of a negative scenario.
This is reported by Business • Media
In 2023, Ukraine was granted $1 billion under the ERA mechanism. It is projected that this year the country will receive $39.4 billion, $2.4 billion next year, and $1.3 billion in the first quarter of 2027. Specifically, $9.1 billion from this year’s revenues and $1 billion from next year will be allocated to form a financial buffer in case of a negative scenario.
Funding Under Base and Negative Scenarios
Under the base scenario, which assumes the war will end by the end of this year, the external funding needed to cover the deficit in 2025 will amount to $39.8 billion, $20 billion in 2026, and $3.1 billion in the first quarter of 2027. In the case of a negative scenario, where the war continues until mid-2026, the external funding required to cover this year’s deficit will be $48.8 billion, $21 billion next year, and $7.1 billion in the first quarter of 2027.