Ukraine and the European Union confirmed they have secured the funds needed to keep Kyiv fighting through the end of the year, after Kyiv warned that a $27 billion defense funding gap threatened its ability to buy weapons and equipment and prepare for winter.
The new agreement, announced on October 1, comes at a troubling moment for Ukraine, with Russia ramping up its missile and drone strikes against Ukrainian energy infrastructure ahead of the coldest months of the year.
Putin State Media Photo
Putin in 2025 Russian State Media Image
Kyiv is also struggling with shortages of air-defense interceptors—including Patriot missiles.
Ukraine also needs to begin ordering weapons that will not arrive until next year.
Only days before the agreement was announced, Ukrainian Prime Minister Sergii Koretskyi warned that Kyiv needed another $27 billion for defense this year.
Ukraine planned to find roughly $7 billion domestically, leaving around $20 billion to be covered with help from foreign partners.
Ukraine’s $27 Billion Hole
In late September, Koretskyi said that Ukraine’s total war-related financial requirements for 2026 had reached around $155 billion. The additional $27 billion wasn’t just to cover battlefield expenses through the end of the year; some of it was needed for advance payments on weapons, drones, ammunition, and other equipment to be delivered in the first quarter of 2027.
The Ukrainian government planned to raise around $7 billion to cover those expenditures by reallocating existing spending commitments and cutting all non-essential spending.
The government then expected foreign partners to help find the additional $20 billion.
Cutting unnecessary expenditure for Ukraine means slashing civilian government spending.
Koretskyi said that Ukraine would prioritize defense, military personnel and their families, pensions, social payments and salaries for teachers and medical workers.
European Union Says It Has the Money
That crisis appears to have been solved for now.
After talks on Thursday, October 1, the European Commission and Ukraine announced they had identified the funding needed to cover Ukraine’s remaining budget and defense needs for 2026.
“Today, thanks to coordinated joint efforts, we identified sources of financing for Ukraine’s budgetary and defense needs for 2026.
We also confirmed the measures necessary to ensure their timely provision.
For 2027, we agreed to promptly allocate €45 billion under the Ukraine Support Loan, taking into account the established conditions.
We will also begin work to identify additional budgetary and defense needs,” a statement issued by the European Commission reads.
The money is tied, in part, to the European Union’s €90 billion Ukraine Support Loan covering 2026 and 2027.
The package includes about €60 billion for defense procurement and another €30 billion for general budget support.
But there’s a catch: Ukraine must continue to meet its political and economic reform conditions, attached to European financing from the start, before all of the money can be released.
The Commission and Kyiv both confirmed they are taking the steps needed to ensure the funds arrive on time.
Russia Increases the Pressure
The urgent scramble for funding comes as Russia expands its campaign against Ukrainian energy infrastructure ahead of the winter.
On September 30, Russia launched one of its biggest combined drone and missile attacks across Ukraine yet.
The strikes heavily targeted energy facilities in Kyiv and the surrounding region, with Ukraine describing it as the largest coordinated attack on the country’s energy infrastructure since last year’s heating season.
And Ukraine is facing new threats from Russia in the form of jet-powered attack drones.
These faster unmanned aircraft are more difficult for Ukraine to intercept with its regular drone interceptors and mobile air defense systems.
Those attacks mean that Ukraine must now dedicate financial and military resources to intercepting those drones, protecting energy plants and other infrastructure that would also cost a fortune and take a great deal of time to rebuild.
Ukraine, therefore, needs to pay for its armed forces and new weapons at the same time it protects its cities and continues to repair infrastructure that was already damaged by Russian attacks.
More Funding Gaps Are Coming
Ukraine has plugged this hole, but more is coming.
Kyiv is already preparing for another substantial shortfall through 2027, with Finance Minister Sergii Marchenko telling international partners late last month that Ukraine expects to need $52.6 billion in external financing next year.
Of that amount, roughly $32.6 billion remains unsecured.
The European Union is therefore looking to allocate a further €45 billion from its Ukraine Support Loan for 2027, but additional defense requirements remain uncertain and are being calculated.
Kyiv may have found the money to keep fighting through the rest of the year, but the search for funding for next year’s fight continues.
About the Author: Jack Buckby
Jack Buckby is a British researcher and analyst specializing in defense and national security, based in New York. His work focuses on military capability, procurement, and strategic competition, producing and editing analysis for policy and defense audiences. He brings extensive editorial experience, with a career output spanning over 1,000 articles at National Security Journal, and has previously authored books and papers on extremism and deradicalization.
