Monitoring of the implementation of the IMF program and the Ukraine Plan (February 2025)
Successful cooperation with international partners is critical for Ukraine. It is crucial for the financing of priority state budget expenditures (domestic revenues are used for security and defence). That is why the RRR4U Consortium continues to regularly monitor Ukraine’s compliance with the IMF financing programme and the implementation of the Ukraine Plan, which is the basis for EU assistance under the Ukraine Facility.
It is not the donors who need to fulfil their obligations under financial support programmes – Ukraine needs them to achieve economic sustainability and to move towards growth and improve the welfare of Ukrainians. It is also a way to gain the trust of all international partners and foreign businesses.
IMF
For 2025, the IMF EFF program provides up to $2.7 billion based on the results of four reviews.
On February 20, 2025, the IMF mission for the seventh review of the EFF program started its work in Kyiv. Our progress will be assessed against quantitative performance criteria and structural benchmarks, with a deadline of the end of December 2024. A successful review could bring us about USD 917.5 million.
Despite the successful completion of six reviews of the IMF program, a positive result for the seventh review looks problematic. After all, the government failed to fulfil the benchmark regarding the cancellation of the “Lozovyi’s amendments” and did not create a new administrative court in time to replace the liquidated DACK.
The next (eighth) review of the program is due in June 2025. It will assess our progress against the quantitative performance criteria and structural benchmarks as of the end of March 2025.
EU
The implementation of the Ukraine Plan is ongoing under the Ukraine Facility.
In December, the European Commission disbursed another tranche under the Ukraine Facility in the amount of EUR 4.1 billion for the fulfilment of the Ukraine Plan indicators in Q3 2024 (one was delayed). This disbursement will bring the total amount of support under the Ukraine Plan for 2024 to EUR 16.1 billion. All indicators for Q4 2024 have been met, and therefore Ukraine will receive EUR 3.5 billion from the EU in March.
SPECIAL TOPICS — “Strengthening the capacity and independence of the Energy Regulator”
What is needed to further strengthen the NEURC’s status?
- Enshrine the status of the NEURC in the Constitution (after the end of martial law) and make appropriate legislative changes, in particular, to remove the NEURC from the government’s subordination by amending the Law on the Cabinet of Ministers, the Law on Central Executive Bodies and the Scheme for Directing and Coordinating the Activities of сentral executive authorities (CMU Resolution No. 442 (2014) as amended).
- Guarantee the NEURC’s autonomy so that its decisions can be appealed only in court, without interference from other authorities. This is already enshrined in law, but de facto governmental or political influence is possible through the mechanisms of subordination to the CMU. It is important to introduce effective mechanisms for responding to any interference in the regulator’s activities by other authorities.
- Ensure timely appointment of new NEURC members after the competitive selection process is completed. Currently, there are no clear rules on the consequences if the CMU does not make a decision on the appointment within 10 working days. A mechanism of responsibility or alternative appointment in case of inaction should be established. The situation with the 2023 competition, where 2 candidates (Oleksandr Kosyanchuk and Mykhailo Bno-Airiian) were selected for 1 vacant position, should also be resolved.
- Remove obstacles to the NEURC’s financial independence, including allowing it to manage its own budget and personnel appointments. The need to approve the NEURC’s budget with the Ministry of Finance creates risks of external influence. The solution may be to require an independent auditor to review the annual financial statements. In addition, Draft Law No. 8222 provides for a limit on the salaries of civil servants, which may negatively affect the regulator’s financial autonomy. The decision is that the NEURC employees do not have the legal status of civil servants.
- To take into account the special status of the NEURC in any governance reforms, focusing on European standards. Any changes in the structure of the executive authorities should not undermine the Regulator’s independence or change its functions. It is necessary to follow the EU practice, where regulators have a clearly defined independent status.
- Introduce a regular system for assessing the NEURC’s performance against clear benchmarks. The first independent assessment should be carried out in 2025. In addition to the Energy Community Secretariat, the assessment may involve institutions such as ACER, CEER, the European Commission or independent auditors. It is important that the evaluation takes place regularly (e.g. every 2-3 years), using transparent criteria and with public access to the results.
Previous monitoring reports are available on the RRR4U website
RRR4U (Resilience, Reconstruction and Relief for Ukraine) is a consortium of four Ukrainian civil society organisations: Centre for Economic Strategy, Institute for Economic Research and Policy Consulting, Institute of Analytics and Advocacy and DiXi Group.
