The International Monetary Fund has agreed to its part of the bailout for Cyprus, saying it will contribute 1 billion euros ($1.28 billion).

The European Union and the IMF this week finalised the details of the bailout, which was agreed on in principle last week. IMF head Christine Lagarde said in a statement issued Wednesday that the fund will provide about a tenth of the overall package of 10 billion euros ($12.8 billion)

EU finance chief Olli Rehn and Lagarde said in a separate, joint statement that “significant challenges lie ahead for Cyprus” as the government there sets in motion a multi-year programme of reforms to rebuild its troubled banking sector and to implement deep spending cuts.

Cyprus hopes the first batch of rescue money will arrive next month.

Keywords: Cyprus bailoutIMF