International Monetary Fund will not give tranche if “Centrenergo” is not be sold

The Memorandum with IMF contains the norms on privatization of a number of state-owned companies during 2019.

According to the document, the sale of “Centrenergo” as well as “Krasnolimanska” coal company and a number of other companies should take place in the first part of 2019.

 The Cabinet of Ministers of Ukraine adopted a starting price for privatization of state-owned generating company “Centerenergo” of $5.984 billion. However, the tender, which had to take place on December 13 was canceled.

The Government undertook to file a law-in-draft on reducing the list of companies prohibited for privatization in the Verkhovna Rada.

In the first part of 2019, Ukraine also has to adopt the new Act on concession and launch concession pilot projects. In addition, with the help of electronic auctions ProZorro by the end of April 2019, 500 small enterprises should be sold.

In addition to the above, the Memorandum provides an increase in tariffs for gas and heating in accordance with the previously announced schedule. Gas prices rose from November 1 by 23%, and heating prices by an average of 20%.

Ukraine also undertook to conduct a monetization of subsidies (the pilot project starts on May 2019), unbundling of “Naftogaz” and to increase gas production volumes.

IMF adopted a new program stand-by for Ukraine on December 18. Under the terms of the program, the first tranche of $1.4 billion is due by December 25. The decision on further tranches will be made in May and November 2019 during the review of Ukraine’s success in fulfilling the conditions of the Memorandum.

“Implementation of the provisions of the Memorandum will allow till the end of the program to attract $3.9 billion of financial support from the IMF, which will go to the reserves of the National Bank of Ukraine. This will strengthen the national currency and help create a stable and predictable investment climate”, the IMF said.

Read the full text of the Memorandum below:




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