U.K. to provide USD 500 mln loan guarantee for Ukraine as IMF mission starts

The British government is going to provide up to USD
500 mln in loan guarantees for Ukraine to support it and “mitigate the economic
effects of Russian aggression,” its website reported on Feb. 23. “This economic
support comes on top of increased support for military equipment from the
Ministry of Defence and enhanced support to the humanitarian system in
Ukraine,” the British government stated.

In related news, the IMF reported on Feb. 23 that it
is starting on this day a virtual mission to discuss the second review of the
IMF’s stand by program. According to the initial schedule, the IMF is ready to
provide a loan tranche to Ukraine worth USD 700 mln following the second
program’s review and USD 1550 mln more if Ukraine passes the third review.

Alexander Paraschiy: With the
U.K. guarantee and the likely IMF tranche, along with the USD 350 mln support
announced by the World Bank this weekend, as well as the millions in support
promised by the American, German, French and Canadian governments earlier in February and the EU’s MFA loan tranche, Ukraine has
been already promised to get over USD 4.0 bln in conventional loans from its
Western partners. If fully withdrawn, such loans will offset Ukraine’s Finance
Ministry’s foreign debt repayment needs for the entire year of 2022 (USD 2.5
bln). Most of the loans are conditional on Ukraine’s reform path committed to
the IMF, so Ukraine still has to do its homework to ensure the availability of
such financing.