By Olena Harmash and Karin Strohecker
KYIV/LONDON, Feb 17 (Reuters) - Pictures of devastation in Ukraine following Russia's invasion have sparked urgent questions over how its reconstruction can be paid for. But before they can even begin to be answered, Kyiv is seeking billions just to ride out this year.
After a 30% contraction in its economy in 2022, Ukraine will need $38 billion by the end of year to cover its budget deficit alone.
"We need these funds for critical costs: funding of salaries and pensions, education and medicine," Prime Minister Denys Shmyhal told a government meeting this week.
"For economic stability and a successful fight against the enemy, Ukraine needs more help."
On top of that, Kyiv said it will need $17 billion this year for urgent energy repairs and de-mining and rebuilding some of its critical infrastructure.
While the EU is expected to provide the lion's share of funds to cover the budget deficit at $18 billion, and Washington a further $10 billion, Kiev has yet to identify sources of funding to meet those additional costs.
It is now pressing for a multi-billion dollar borrowing program from the International Monetary Fund, with the fund meeting the country's officials in Warsaw this week.
The fund approved a four-month monitoring program for Ukraine in December aimed at maintaining economic stability and helping promote donor financing, which should eventually pave the way towards "a possible full-fledged IMF-supported program", it said.
The scope of that program is a source of ongoing debate. This is complicated by the premise that IMF financing is extended to countries that have the "institutional and political capacity and commitment to implement" a fund program, and generally does not include countries at war.
In the past 12 months, Ukraine has received $36.4 billion from external sources, of which nearly 60% were concessional loans and the remainder grants, according to ministry of finance data.
Washington was Kyiv's top lender, providing nearly $13 billion in grants over the period, while the European Union extended just over $11 billion in a mix of grant and loans. Number three was the IMF, with the Washington-based lender providing $2.7 billion.
PRIVATE SECTOR
Aside from help on a national level, a number of multilateral lenders focussed on extending financing to the private sector have also helped shore up Ukrainian firms since the start of the year.
The European Bank for Reconstruction and Development (EBRD) deployed some 1.7 billion euros to Ukraine for investments in vital infrastructure, energy and food security and support for the private sector in 2022.