18:20 20.04.2018

IMF notes importance for Ukraine to depoliticize process on setting energy prices

2 min read
IMF notes importance for Ukraine to depoliticize process on setting energy prices

It is critically important for Ukraine to depoliticize decision making regarding energy prices for further promotion under the program of cooperation with the International Monetary Fund (IMF), Director of the IMF's European Department Poul Thomsen has said.

"We are concerned that energy prices again have become a political issue, and we think that it is critically important that Ukraine return to this policy of depoliticizing decision making regarding energy prices," he said at a briefing in Washington on Friday.

Thomsen also said that expected de-politicization "is critical part of our program and will have to be a critical part of us moving forward with the program."

As reported, the four-year-EFF program worth SDR 12.348 billion (about $17.46 billion at the current forex rate) was launched in March 2015 with a first disbursement of $5 billion. It originally suggested a quarterly review of the program, the allocation of three more tranches worth SDR 1.18 billion each in 2015 and a reduction in quarterly disbursements in 2016-2018 to SDR 0.44 billion ($0.62 billion).

According to the IMF, this is the 9th program of cooperation between Ukraine and the IMF. The first stand-by program was opened way back in April 1995. Ukraine has managed to fully implement only one program, and another three were completed with changes.

Under the ongoing program, Ukraine has managed to receive a second tranche worth $1.7 billion early in August 2015 with a little delay, which was followed by a long break as Ukraine had failed to meet a number of conditions, which was aggravated by the political crisis and government reshuffles.

Talks on further financing resumed after the appointment of a new Cabinet of Ministers headed by Volodymyr Groysman in April 2016. However, the IMF decided to issue a third disbursement worth $1 billion only in the middle of September 2016 and a fourth one on April 3, 2017.

The receipt of the next tranche of the IMF loan, which was originally scheduled for May-June 2017, has been postponed for an indefinite term due to the Ukrainian side's failure to fulfill certain conditions.

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