(Kyiv) Ukraine announced on Monday that it had reached a preliminary agreement on restructuring part of its debt worth $20 billion, as the country has been facing a Russian invasion for two and a half years.
According to the Ukrainian Finance Ministry, Kyiv has reached “an agreement in principle” with a group of international private creditors to restructure thirteen series of Eurobonds, a move that will save the country $11.4 billion over the next three years and $22.75 billion by 2033.
“The released funds will support Ukraine’s macro-financial stability, which will allow us to finance the most urgent needs in the face of the Russian invasion,” Finance Minister Sergei Marchenko said on X.
According to him, the Ukrainian government had made “considerable efforts to bring this decision to fruition” after negotiations with a group representing about a quarter of private bondholders. The group welcomed in a statement that it had reached “a rapid and constructive agreement with the government” of Ukraine.
We are pleased to be able to provide significant debt relief to Ukraine, assist in its efforts to regain access to international capital markets, and support the country’s future reconstruction.
Ukrainian Finance Minister Sergei Marchenko
Prime Minister Denys Shmygal said that restructuring Ukraine’s debt would “free up resources for defense, social spending and reconstruction.”
The International Monetary Fund (IMF), a key partner of Ukraine, welcomed “an important step in the authorities’ overall strategy aimed at restoring debt sustainability.”
The organization said that the Ukrainian authorities’ restructuring strategy and other measures “will be essential to reduce Ukraine’s debt burden to sustainable levels, which will create room for essential spending and support growth.”
Ukraine has benefited from significant international financial support since the start of the Russian invasion in 2022, but has also had to go into debt to ensure its defense, keep public services afloat, pay civil servants’ salaries and provide care for internally displaced people.