Ukraine is set to agree a new loan of about $5 billion over three years from the International Monetary Fund (IMF), Bloomberg reported on Sept. 14, citing sources close to the talks.
The news comes days after Prime Minister Oleksiy Honcharuk acknowledged that the IMF mission had arrived in Ukraine to discuss new parameters for its cooperation with the country.
“It’s too early to talk about the results of the negotiations,” said Honcharuk on Sept. 11, three days before Bloomberg reported that Ukraine was poised to seal a deal.
The reported terms are that Ukraine would receive close to $5 billion throughout a three-year period, on the conditions that the government would tackle corruption, limit the budget deficit and implement a new Land Code, in the wake of Ukraine lifting the land moratorium.
The news comes less than a month after Ukraine’s new Cabinet of Ministers, supported by President Zelensky, was voted into office.
During the first Cabinet meeting Honcharuk promised to lift the land moratorium, introduced in 2001, and draw up a new Land Code by Oct. 1.
The moratorium on selling farmland was introduced in 2001 until a new Land Code could be adopted. However, that code was never drawn up and the moratorium stayed in place ever since.
According to Satu Kahkonen, the World Bank country director for Ukraine, lifting the land moratorium would boost Ukraine’s gross domestic product by 2 percent.
The government-favored version, reported by Ukrainian media, is that farmland will be sold only to Ukrainian citizens or Ukrainian companies. Limitations on the amount of land that can be purchased will be put in place: no more than 35 percent of farmland in local communities will be sold to one entity, 15 percent in an oblast and 0.5 percent countrywide.
However, there is still a risk of the IMF turning its back on Ukraine if certain conditions are and commitments are not met by the country.
Oligarch Ihor Kolomoisky and his supporters have turned up the heat on Ukraine’s central bank and PrivatBank, Ukraine’s largest bank founded by Kolomoisky, but nationalized in 2016 after investigators discovered a $5.5 billion hole in its books.
A reversal of this nationalization is widely seen as a red line for the IMF.
“Any attempt to reverse the nationalization of PrivatBank would be a huge red flag, as the IMF and others have made clear,” said Michael Carpenter, a Ukraine expert and head of the Penn Biden Center for Diplomacy and Global Engagement in Washington.
Read More: PrivatBank troubles renew questions about Kolomoisky’s hold over Zelensky
