Ukraine received $18 billion in external financing in Q2 2026, accounting for more than three-quarters of all such inflows in the first half of the year. Overall, external financing reached $23.5 billion in H1 2026, 13.8% more than in the same period of 2025. This is according to the latest edition of KSE Institute’s Ukraine Financial Support Tracker, which provides a regular assessment of Ukraine’s external financing landscape and tracks disbursements across the main international support mechanisms. Of the $18 billion received in Q2, $4.3 billion came in the form of loans, $9.2 billion in grants, while another $4.5 billion was provided as military support under the Ukraine Support Loan (USL).

The key development of the quarter was that the Ukraine Support Loan became operational. On June 25, Ukraine received the first $3.7 billion (€3.2 billion) tranche of macrofinancial support, followed by a further $8.5 billion (€7.4 billion) from the USL’s military component in June and July. Up to $52 billion (€45 billion) is expected to be provided through the mechanism in 2026. Amendments to the Ukraine Plan under the Ukraine Facility were also adopted, moving $9.6 billion (€8.35 billion) in 2026 USL funds into the Facility’s conditionality framework.

In June, Ukraine also received $3.2 billion (€2.8 billion) under the Ukraine Facility unrelated to the USL after significant delays. The disbursement followed methodological revisions and certain concessions regarding the assessment of Ukraine’s reform commitments. In particular, the revised approach allowed the European Commission to count four indicators that Ukraine had fulfilled ahead of their original deadlines. Further disbursements will depend on the timely fulfillment of reform indicators.

Financing under the Extraordinary Revenue Acceleration (ERA) mechanism is nearly exhausted. In Q2, Ukraine received $5.1 billion in grants from Japan, the United States, and Canada, while the United Kingdom provided another $1 billion for defense needs outside of the budget. Only a final $1.2 billion tranche from Japan remains and is expected in 2027. Altogether, close to 98% of ERA funds have already been delivered.

The IMF made no disbursement in Q2, although the quarter brought a decisive step toward the tranche transferred in July. Ukraine and the IMF reached an agreement on the first review of the new Extended Fund Facility in June. All end-March quantitative performance criteria were met, although the end-June target on net international reserves was missed. Following Board approval in July, Ukraine received $690 million. The IMF also noted that implementation of reforms had slowed, with several benchmarks delayed or unmet.

Separately, the Ukraine Recovery Conference 2026 reinforced near-term financing. Key outcomes included $3.39 billion under the World Bank’s First Ukraine Jobs and Private Sector Growth Development Policy Operation, including $2.35 billion in grants and more than $1 billion in IBRD loans guaranteed by the UK and Japan.

According to KSE Institute estimates, external financial support is projected to reach $76 billion in 2026 and $61.4 billion in 2027. However, the remaining financing gap is estimated at $19.5 billion in 2027, even after $4 billion of overfinancing is carried over from 2026. A further $47.9 billion gap could emerge in 2028–29. The key driver is the assumption that the full-scale war will last into H2 2027, resulting in higher defense needs, lower tax revenues, and lower market financing.

The slowing pace of reform implementation has emerged as a key risk to Ukraine’s external financing outlook. The backlog of unmet indicators under the Ukraine Facility continues to grow, while reform requirements are becoming increasingly demanding. A significant share of future financing will depend on Ukraine’s ability to meet these commitments.