EBRD granted $300 mln loan to Ukraine for gas purchase - Naftogaz

Source : 112 Ukraine

Credit agreement between the EBRD and Ukraine tied with the government guarantee to reform Naftogaz corporate governance
14:40, 23 October 2015

Ukraine has signed loan arrangements with the European Bank for Reconstruction and Development (EBRD) for $ 300 million to finance the purchase of gas, the press service of Naftogaz reports.

Related: Ukraine to receive $300 mln loan from EBRD for natural gas purchases

"Today in Berlin Minister of Finance of Ukraine Natalie Jaresko and EBRD First Vice-President Phil Bennett signed a government guarantee agreement on EBRD loan to finance the purchase of gas of Naftogaz company.The funds in the amount of $ 300 million are intended for the purchase of about 1 billion cubic meters of gas on the western border of Ukraine. One of the conditions of the EBRD loan is the implementation by the Government of Ukraine of the Action Plan on corporate governance reform in Naftogaz. By signing the indemnity contract with the loan agreement, Ukraine undertakes the commitment to realize this plan,” said in a statement.

In addition, the loan agreement was signed by the EBRD Managing Director for Energy and Natural Resources, Riccardo Puliti, and the CEO of Naftogaz, Andriy Kobolev, stated at the EBRD website. The loan is tied to a programme of corporate governance reforms at NJSC (National Joint Stock Company) Naftogaz.

Related: EBRD and Ukraine signed a Memorandum of capital market development

"The EBRD loan is conditional upon a programme of corporate restructuring at Naftogaz, including the creation of a supervisory board of  independent and qualified directors, the introduction of internal audit, compliance, anti-corruption and risk management functions and an ownership and governance structure in line with best international practice," said in a statement.

Also, provided loan is renewable for a period of 3 years. Within 3 years Naftogaz may partially return the loan and then again re-borrow this amount.

The arrangements between Ukraine and the European Bank for Reconstruction and Development (EBRD) were signed on the fringes of Ukraine-Germany economic business forum, which started in Berlin today, October 23. Ukrainian delegation headed by the Prime-Minister of Ukraine Arsenii Yatseniuk holds negotiations with German Chancellor Angela Merkel and other represantatives of German government and business.

Related: EBRD to invest $1 billion in Ukraine

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