The International Monetary Fund (IMF) approved a $17.01bn (€12.3bn) aid package for Ukraine on Wednesday, including provisions to pay off incumbent natural gas supplier Naftogaz’s debt to Gazprom.
This enables the immediate disbursement of $3.19bn, with about $2bn allocated to budget support.
The two-year stand-by arrangement targets 2018 for the elimination of Naftogaz’s deficit, which would be achieved through reforms to improve efficiency and transparency. In addition, the IMF indicated that there will need to be increases in Ukraine’s gas and heating tariffs.
Gazprom recently gave Naftogaz until 16 May to pay off its outstanding debts, as well as an end of the month deadline to pre-pay for volumes until June ( see ESGM 30 April 2014 ).
Earlier in the month the Russian giant raised its gas charges to Ukraine by 45% compared to the price paid in the first quarter ( see sister publication EGM 15 April 2014 ).