By Andrea Shalal and David Lawder
WASHINGTON (Reuters) -The International Monetary Fund will soon begin a staff mission to Ukraine to discuss its financing needs and a potential new lending program, spokesperson Julie Kozack said on Thursday, underscoring the need for continued anti-corruption efforts in the war-torn country.
Ukrainian Prime Minister Yuliia Svyrydenko on Thursday announced an audit of all state-owned companies, including in the energy sector, following an alleged $100 million corruption scandal that has led to the suspension of two cabinet ministers.
Anti-corruption authorities said this week they had detained five people and identified two others still at large suspected of involvement in the alleged plot to control procurement at nuclear agency Energoatom and other state enterprises.
Ukraine is in talks with the IMF about a new four-year lending program for the country that would replace the current four-year $15.5 billion program. Ukraine has already received $10.6 billion of that amount.
Kozack told reporters at a regular briefing that the IMF staff mission would center on policies to safeguard Ukraine’s macroeconomic stability and ensure its debt sustainability, with a focus on reforms to promote domestic revenue mobilization and to strengthen governance and combat corruption.
“We’ve been saying for some time that Ukraine needs a robust anti-corruption architecture to level the playing field, safeguard public resources, improve the business climate and attract investment,” Kozack said, calling efforts to fight corruption a central requirement for Ukraine’s donors.
ANTI-CORRUPTION INSTITUTIONS MUST BE ABLE TO DO THEIR WORK
“The most recent uncovered evidence of corruption in the energy sector … highlights the importance of pressing forward with anti-corruption efforts in Ukraine and ensuring that the anti-corruption institutions have the capacity, trust and freedom to go about their duties,” she said.
Kozack said the IMF was closely monitoring discussions that Ukrainian authorities were having with creditors, although it is not party to the discussions themselves.
She said the IMF team visiting Ukraine would liaise with Ukraine’s international partners to identify the appropriate financing vehicles to support the country, now in its fourth year of fighting Russia’s invasion.
That would include ensuring that any new financing is on “terms consistent with Ukraine’s overall debt sustainability,” she said, when asked about concerns raised by Ukraine’s GDP warrant holders last week about another debt restructuring.
Warrant holders last week said they wanted a “claim reinstatement mechanism” as part of any new bonds they accepted as part of Kyiv’s long-sought restructuring of the debt instruments.
Ukraine needs a new IMF program since the one agreed on in 2023 assumed the war would end in late 2025, a prospect that is still not in sight. As was the case in 2023, Western countries will have to offer assurances to guarantee the IMF loan since the Fund normally does not lend to a country at war.
(Reporting by David Lawder and Andrea Shalal; Editing by Lisa Shumaker and Deepa Babington)
