Ukraine will secure $841 million from the World Bank under financial guarantees from Canada, Prime Minister Serhiy Koretskyi has announced. The funds will be channelled through the PEACE in Ukraine project to reimburse the state budget for pension payments. The funding is intended to support social spending against the backdrop of a significant budget deficit and military expenditure.
Briefly about the main points
- The World Bank will provide Ukraine with $841 million.
- Canada is providing financial guarantees for the package.
- The funds will be used to offset budgetary expenditure on pensions.
- This is not about increasing pensions, but about reimbursing expenses.
- Through the PEACE programme, around $53.5 billion in support was mobilised.
The funds will cover payments already made
Under this mechanism, the state first makes the planned social expenditure, and international funding subsequently reimburses part of these costs. The reimbursement does not constitute a direct distribution of funds amongst recipients and does not, in itself, alter the amount of pensions.
This model reduces the burden on public finances and helps to ensure timeliness of social benefits. Ukraine announced the additional funding proposal in August 2026; its stated aim was also to support the provision of key public services.
PEACE has become one of the largest budget support channels
The World Bank launched the Public Expenditures for Administrative Capacity Endurance programme following the start of the full-scale Russian invasion. The programme supports non-military expenditure, including social assistance, the salaries of staff at certain state and social institutions, and essential services.
As at the end of July, approximately $53.5 billion had been mobilised through PEACE. This figure represents the resources raised, not the amount actually paid out as at a specific date. Over the period 2022–2023, the programme enabled the reimbursement of approximately $12.7 billion in pension expenditure.
Compensation for civilian expenditure frees up budgetary resources
In 2026, a significant proportion of Ukraine’s domestic revenue is allocated to the security and defence sector, whilst social and administrative expenditure is heavily dependent on support from partners. According to IMF estimates, this year’s budget deficit, excluding grants, stands at 2.148 trillion hryvnia, or around 21% of GDP.
Compensation for civil expenditure by international partners gives the government greater scope to use its own revenue for other budgetary needs, particularly defence. Canada also announced this month a number of specific measures relating to the energy sector and gas procurement; these are not part of the new PEACE package.
