After nearly 5 months of talks, the Ukrainian government said Thursday that it has reached a deal with its international creditors to slash its $18 billion debt by 20 percent, according to media reports. The debt relief is vital for the conflict-ravaged nation to nurse its economy back to health.

In addition to the 20 percent haircut -- which provides the country immediate debt relief of approximately $3.6 billion -- the deal with the Franklin Templeton-led creditor committee also pushes back maturities on government debt by four years.

Additionally, Ukraine’s repayments on its bonds will depend on how quickly its economy, decimated by a protracted war with Moscow-backed separatists in the east -- grows. Ukraine will pay nothing if its economy grows less than 3 percent annually. However, the agreement sets interest at 7.75 percent on all maturities if the country’s economy grows at a faster-than-expected rate -- a provision that might allow the creditors to recoup some losses.

Franklin Templeton -- a global investment firm headquartered in the U.S. -- owns about $9 billion of Ukraine’s bonds.

“[The deal] is a ‘win-win,’ creating a virtuous economic circle for Ukraine and its international commercial creditors who also have a vested interest in seeing Ukraine’s economy thrive,” the country’s finance ministry reportedly said, in a statement released Thursday, labeling the accord a “critical step” toward “macroeconomic stability.”

However, Russia has refused to participate in the new restructuring program, Reuters reported, citing Russian Finance Minister Anton Siluanov. This leaves in doubt the fate of the Russia-owned $3 billion worth of bonds that are set to mature in December.

Securing a debt restructuring is also essential for Ukraine to meet conditions put forth by the International Monetary Fund in a March bailout agreement. As part of the four-year, $17.5 billion bailout deal, the Ukrainian government had been asked to reduce debt repayments in any given year to no more than 10 percent of GDP latest by 2025, and secure $15 billion worth of debt relief from its international creditors.