On December 20, 2024, the IMF Board of Directors approved the sixth review of the EFF program. And on December 23, the State Budget of Ukraine received the seventh tranche from the Fund in the amount of about $1.1 billion. The total amount of disbursements under the program reached about $9.8 billion (63% of the $15.5 billion planned under the program).
The updated Memorandum includes three new structural lighthouses. Two in the financial sector and one in the energy sector.
The next, seventh, review of the IMF program is scheduled for March 2025. It will, among other things, cover progress in the implementation of the December milestones. At the same time, the government has already failed to fulfill two of the milestones in a timely manner: the repeal of the Lozovyi amendments and the creation of the Supreme Administrative Court. At the same time, there is a high risk of even a delayed adoption of the Lozovyi amendments.
In December, the European Commission disbursed another tranche under the Ukraine Facility in the amount of EUR 4.1 billion for the fulfillment of the indicators of the Ukraine Plan in the third quarter of 2024 (one was delayed). This disbursement will bring the total amount of support under the Ukraine Plan for 2024 to €16.1 billion. We assess all the indicators for the fourth quarter as fulfilled, and therefore Ukraine may receive €12.5 billion from the EU in February.
In 2025, funding will primarily come from the ERA mechanism, which will be financed in the future by the proceeds of frozen Russian assets. Funding from the EU and the IMF will depend on the timely implementation of indicators and structural benchmarks. Unfortunately, the risk of delays in fulfilling obligations is growing.
Successful cooperation with international partners is critical for Ukraine. The financing of priority state budget expenditures (domestic revenues are directed to security and defense) depends on it. That is why the RRR4U Consortium continues to regularly monitor Ukraine’s compliance with the terms of the IMF financing program and the implementation of the Ukraine Plan, the fulfillment of which is the basis for EU assistance under the Ukraine Facility.
Fulfillment of obligations under financial support programs is not necessary for donors – Ukraine needs them to achieve economic sustainability and transition to growth and increase the welfare of Ukrainians. It is also a way to gain the trust of all international partners and foreign businesses.
Source: RRR4U
