Ukraine to adopt electricity, gas markets liberalization roadmap once crisis ends - memorandum signed with IMF

MOSCOW. Dec 28 (Interfax) - The cabinet of ministers of Ukraine will adopt a roadmap for the gradual liberalization of the gas and electricity markets with an implementation plan and clear time frames within six months after the end of martial law, according to the updated Memorandum of Economic and Financial Policies following the sixth review of Ukraine and the International Monetary Fund's (IMF) Extended Fund Facility (EFF) program.

"The roadmap will be based on technical analysis of the financial condition of the sector, in coordination with the European Commission," Ukrainian media outlets cited the memorandum published on the Ukrainian Finance Ministry's website as saying.

Once the crisis ends, the reform agenda in the energy sector will require resuming and enhancing competition in the wholesale and retail electricity and gas markets, the memorandum said. Additionally, ensuring the system's resilience and reducing quasi-fiscal obligations will require a gradual increase in gas and electricity tariffs to the cost recovery level while allocating sufficient targets supports to protect vulnerable households.

"Potential reform measures, once conditions allow, include additional gradual tariff increases (subject to a new tariff methodology and social considerations), external financing, and transparent and exceptional direct budget support to energy SOEs pending available budgetary resources," it said.