On December 20, 2024, the IMF Executive Board approved the sixth review of the EFF program. On December 23, Ukraine’s State Budget received the seventh tranche from the Fund in the amount of about USD 1.1 bn. The total amount of payments under the program reached about USD 9.8 bn (63% of the USD 15.5 bn planned under the program).
The updated Memorandum includes three new structural benchmarks. 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 implementing the December structural benchmarks. Meanwhile, the authorities have already failed to complete two structural benchmarks: the cancellation of the “Lozovyi’s amendments” and the creation of the new administrative court. At the same time, there is a high risk even with the deferred execution of benchmarks.
In December, the European Commission disbursed another tranche under the Ukraine Facility in the amount of EUR 4.1 bn for the fulfilment of the Ukraine Plan indicators 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 met, and therefore Ukraine may receive EUR 3.5 bn 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 critically important for Ukraine. The financing of priority state budget expenditures depends on this (internal revenues are directed to security and defence). That is why the RRR4U Consortium continues to regularly monitor Ukraine’s fulfillment of the terms of the IMF financing program and the implementation of the Ukraine Plan, the fulfillment of which is the basis for providing assistance from the EU within the Ukraine Facility.
Fulfillment of obligations under financial support programs is not needed by donors – they are needed by Ukraine to achieve economic stability and transition to growth and increase the welfare of Ukrainians. And it is also a way to gain trust from all international partners and foreign businesses.
