Ministry of Finance of Ukraine signs loan guarantee agreement with EBRD amounting USD 300m for gas purchase

10/23/15

Today, ministry of finance of Ukraine Natalie Jaresko and first vice-president of the EBRD Phil Bennett have signed a loan guarantee deal meant to provide USD 300m to “Naftogaz Ukrainy” to purchase gas in Europe.

This loan shall help to cover a part of Ukraine’s needs for the purchase and storage of gas in the last weeks before the start of the heating season. Thus, the sufficient volume of gas shall be secured for a successful winter season.

The loan is also supposed to contribute to Ukraine’s energy security as well as to the reform of “Naftogaz Ukraine” and the entire energy sector. That
was the reason for the Ministry of Finance to endorse the deal.

This loan is renewable, i.e. “Naftogaz Ukrainy” can apply for it once again, should it need funds for gas purchase within next 3 years.

«We are thankful to the EBRD for this loan agreement, a true milestone of our shared commitment to Ukraine’s energy sector reform. With the EBRD’s support, we have taken a significant step forward in ensuring financing for continuous gas supplies for the winter», Natalie Jaresko said during the signing.

The EBRD’s Phil Bennett stated: “By providing this loan to Naftogaz, we are not only helping to strengthen energy security in Ukraine but we also foster the reform agenda in the energy sector making it more open, transparent and efficient”.

Today’s agreement is a part of a more comprehensive program of international support for Ukraine which became possible due to the active cooperation between Ukraine and the IMF. This loan is a further vote of confidence from the international community for the Ukrainian Government’s reform agenda.

The loan is aimed to further facilitate the comprehensive reform of Ukraine’s gas sector and comes after the December 2014 EBRD loan program targeting the reconstruction and modernization of Ukraine’s pipeline system. The loan was made available due to Ukraine’s implementation of a renewed Corporate Governance Action Plan for Naftogaz, which is being jointly led by the EBRD, World Bank and the EU.

Loan terms:

The loan has been provided for 3 years.

The interest rate is under 1.5% p.a. which is extremely favorable for Ukraine.

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