Risks of Ukraine’s failure to fulfil its obligations to the IMF and the EU are growing: experts of the RRR4U Consortium tell what will happen to funding

On 28 February, the #RRR4U Consortium presented the 12th issue of the Monitoring of the IMF Programme and EU Assistance under the Ukraine Facility.

This year, Ukraine will face four IMF reviews, and if they are successful, we will receive tranches worth USD 2.7 billion. This was stated by Vyacheslav Kurylo, Policy and Data Analyst at the Institute for Analysis and Advocacy.

“Currently, there is a tendency for untimely fulfilment of obligations: for example, by the end of February this year, we had to fulfil five structural milestones, but managed only one – to adopt amendments to the Budget Code on the integration of public investment management into the budget process. Therefore, in order to receive all tranches in 2025, we need to intensify our efforts to fulfil the milestones”, said Vyacheslav Kurylo.

Since 20 February, the IMF mission has been working in Kyiv on the seventh review of the EFF Extended Fund Facility. Despite the fact that the Ukrainian authorities did not fulfil the structural benchmark concerning the cancellation of the Lozovyi amendments and did not establish a new administrative court to replace the liquidated DACK in a timely manner, the mission nevertheless agreed on the revision of the programme at the staff level. Thus, some of the unfulfilled obligations were postponed (but not cancelled), while others could have been a preliminary measure for the IMF Executive Board to take a decision. If the Board makes a positive decision, Ukraine will receive a tranche of USD 917.5 million.

With regard to the implementation of Ukraine’s Plan under the Ukraine Facility, the European Commission approved Ukraine’s report confirming that 13 indicators for the fourth quarter of 2024 were met. This means that Ukraine will receive €3.5 billion from the EU in March.

At the same time, by the end of March, we have to fulfil 16 more indicators, 5 of which have already been fulfilled and 9 more are in progress, said Maksym Samoiliuk, economist at the Centre for Economic Strategy.

“Unfortunately, there is a high risk that at least two of these indicators will not be fulfilled by Ukraine on time or that their implementation will face significant difficulties. We are talking about the reform of civil service remuneration and the increase in the staff of the High Anti-Corruption Court,” said Maksym Samoiliuk, economist at the Centre for Economic Strategy.

Since the European Commission has not approved the methodology of partial tranches, failure to meet one of the indicators may lead to a delay in Ukraine’s receipt of the entire tranche for the 1st quarter indicators in the amount of EUR 4.5 billion. This was stated by Oleksandra Betliy, Senior Research Fellow at the Institute for Economic Research and Policy Consulting, who moderated the event. Summarising the implementation of international support programmes, she drew attention to the special topic of the event: ‘Strengthening the Capacity and Independence of the Energy Regulator’.

Ukraine is committed to ensuring the independence and capacity of the National Energy and Utilities Regulatory Commission (NEURC). In particular, the list of necessary measures includes the establishment of a special status for the Commission, an independent external assessment, etc.

“The regulator is not only an arbitrator who has to balance the interests of all players, but also a conductor who ensures that markets work efficiently, are liquid and do not accumulate debts. The energy and utilities markets cover transactions worth hundreds of billions of hryvnias and directly affect all consumers. This requires the NEURC’s independence and professionalism”, said Roman Nitsovych, Research Director at DiXi Group.

Andriy Gerus, Chairman of the Committee on Energy, Housing and Utilities of the Verkhovna Rada of Ukraine, believes that the NEURC’s independence is sufficiently ensured at the legislative level.

“There were talks about adding the regulator to the Constitution, as it mentions the Antimonopoly Committee. However, firstly, such changes are not possible during the war, and secondly, it will not solve the problem. We should focus not on another change in legislation, as we have already had enough of them, but on its implementation”, said Andriy Gerus.

By the end of October 2025, the Energy Community Secretariat should make an independent assessment of the NEURC. Andriy Yuris, Head of the ECRB Department of the organisation, spoke about the methodology.

“This is both an independent and an institutional assessment that identifies various aspects of independence reflected in European legislation. It is a check on how all these aspects are implemented in practice and reflected in national legislation. That is, we look not only at the legislation but also at its implementation. We will make such assessments every three years”, says Andriy Yuris.

Aaron Kerpel-Fronius, Energy Adviser at the EU Delegation to Ukraine, spoke about the EU’s expectations.

“The European Commission is working in close tandem with the Energy Community Secretariat to ensure that future Ukrainian legislation strengthens the financial and organisational independence of the Regulator,” said Aron Kerpel-Fronius. He stressed that all the requirements that the European Commission has for Ukraine are actually needed by Ukrainians themselves to increase market transparency and regulatory stability. This, in turn, will help attract more investment and stabilise prices.

For more details, please follow the link.

Watch the video here. 

The preparation of the Monitoring and this event were supported by the International Renaissance Foundation.

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 for Analysis and Advocacy, DiXi Group.