Prime Minister of Ukraine Denys Shmyhal notes that Ukraine expects the IMF Executive Board to approve the first tranche of the agreed Stand-By Arrangement for the next 18 months on June 5.
“We have completed negotiations with the IMF, the president also had a telephone conversation with the IMF leader, and on June 5 we expect the signing of the agreement and the receipt of the first tranche. The program is for 18 months, a loan for 5 years, the amount is $5 billion. And this is a Stand-By Arrangement with rather simplified conditions, which will enable us to move calmly in overcoming the consequences of the coronavirus crisis that already exist,” he said on the air of the Savik Shuster Freedom of Speech program on Ukraine TV Channel.
Shmyhal pointed out that the first tranche from the IMF will be $1.9 billion, which Ukraine expects on June 5-6, another $1.6 billion will be in autumn, and $1.5 billion next year.
JSC Ukreximbank and the State Agency of Automobile Roads of Ukraine (Ukravtodor) with the participation of President of Ukraine Volodymyr Zelensky have signed an agreement to provide the first tranche for updating roads in Ukraine in the amount of UAH 5.782 billion from the amount of financing, which will total UAH 19.3 billion.
“Despite the quarantine measures in our country, the most important thing is that the state works and, together with the banking sector and construction companies, builds kilometers of roads and “sews” our country! As I said, roads, bridges are a priority,” Zelensky said after the signing of the agreement.
He emphasized that the Big Construction program is the image of Ukraine as a country with modern and high-quality roads on which you can travel. The president also noted that the program will contribute to the creation of new jobs.
The president’s press service notes that the attraction of funds from Ukreximbank under state guarantees by Ukravtodor became possible due to the adoption of laws on amendments to the budget that Zelensky signed on February 4, 2020, and thanks to the decision of the National Bank to lower the refinancing rate. The loan interest rate will be 10.5% per annum.
“We, as a state bank, support the Big Construction project. With the signing of the agreement, Ukravtodor will receive the first tranche in the amount of UAH 5.782 billion at a rate of 10.5% per annum, which is 2% lower than the Cabinet of Ministers foresaw,” chairman of the board of Ukreximbank Yevhen Metsger said.
He said that Ukreximbank is ready to become a financial partner of the Big Construction project and lend its shoulder to all companies, in particular contractors, that will be involved in the construction of the facilities under this program.
Kernel, a large Ukrainian agricultural group, has entered into an amendment and restatement agreement with a syndicate of European banks and the European Bank for Reconstruction and Development (EBRD) on extending for one year its $100 million pre-export credit facility until June 30, 2022, the group has reported on the website of the Warsaw Stock Exchange (WSE).
According to the report, on September 23, 2019, Kernel signed the amendment and restatement agreement to its pre-export credit facility dated February 2, 2018. Total available limit under amended facility was increased up to $300 million by adding additional tranche of $200 million maturing on June 30, 2021.
Pre-export credit facility will be used by the company to fund the working capital needs of its grain trading and transshipment business in Ukraine.
Kernel is the world’s largest producer and exporter of sunflower oil, the leading producer and supplier of agricultural goods from the Black Sea region to the world markets.
Ukraine could receive a tranche under the Stand-By Arrangement with the International Monetary Fund (IMF) in June, First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova has reported. “Most likely, in June Ukraine may receive a tranche, because if they the IMF mission come in May, they simply won’t be able technically to provide the tranche in May,” she said in an interview with the LB.ua online portal. According to Rozhkova, the first unexpected and unpleasant surprise for the IMF was the cancellation of the article on illegal enrichment in Ukraine, the second one was the situation with the court rulings on PrivatBank.
“Of course, we’ve informed them about the events and that first we need to get the decisions of courts and only after that we will be able to comment on some legal position, the arguments of the courts … As you know, the IMF makes its decisions at a meeting of the executive board. The mission comes to the board, reports on the trip, on the results of the borrower’s work. What will they say this time: look, they reverse the reform?” she said.
Minister of the Cabinet of Ministers Oleksandr Saenko expects that the next tranche from the European Union (EU) in the amount of EUR 10-20 million for governance reform could arrive in April or May 2019. “We had a very good political dialog with our European partners. They already have an official position regarding readiness to continue supporting this reform. We expect the next tranche in April-May,” he said in an interview with Interfax-Ukraine.
According to Saenko, the amount of the tranche will depend on the criteria, but according to forecasts, next year Ukraine will receive about EUR 10-20 million for this reform.
“Next year, much will change in the remuneration of civil servants. The remuneration of new reform specialists is a prototype of the remuneration model of civil servants, where the fixed part is at least 70%. This model is laid down in the law on public service. For specialists on reform issues, these parameters have already been established. We have limited the bonuses to 30%. This makes it impossible to establish sky-high bonuses,” the minister added.
Saenko said that now there is still a big imbalance in the system itself, when the position salary is minimal, and total wages and salaries increase significantly due to allowances and bonuses. This, according to the minister, creates dependence on the political biased will of the chief with all the attendant consequences.
“The new system will be more transparent and balanced, and we will gradually transfer the financing of the reform at the expense of the main programs of the ministries’ central offices,” Saenko said.
The amount of the first tranche under the new Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) could be $1.5-1.9 billion, First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova has said. “We recently had a monetary briefing where the NBU Governor Yakiv Smolii said that the tranche could be received by the end of this year. As for the sum [of the first tranche], I think that it would be some $1.5-1.9 billion,” she told reporters at the BEPSinUA forum in Kyiv on Thursday.
As reported, the International Monetary Fund (IMF) staff and Ukraine have reached an agreement on economic policies for a new 14-month Stand-By Arrangement (SBA), which will replace the arrangement under the Extended Fund Facility (EFF), approved in March 2015 and set to expire in March 2019.
The agreement is subject to approval by the fund’s management and approval by its board of directors. The board’s meeting is expected to take place at the end of the year after the Verkhovna Rada adopts the national budget for 2019 in accordance with the recommendations of the IMF and the increase in gas and heating tariffs for households, reflecting market trends while maintaining support for low-income consumers.