The European Bank for Reconstruction and Development (EBRD) Board of Directors has approved a project to extend a loan of up to $300 million to Ukraine’s national gas and oil company Naftogaz, according to the press office of the Bank. The loan is aimed to strengthen Ukraine’s energy security by supporting diversification of natural gas suppliers and delivery routes.
Riccardo Puliti, EBRD Managing Director, Energy and Natural Resources, said: “This project is another important landmark in the reform of Ukraine’s gas sector. Our loan will support key areas such as the establishment of a truly independent regulator, the improvement of tariff methodology as well as the introduction of a gas network code. It will contribute to better governance and financial sustainability of Naftogaz”.
It is closely linked to a previous Naftogaz pipeline project to upgrade and repair a key section of Ukraine’s gas transmission system, the western part of the Urengoy-Pomary-Uzhgorod pipeline, which was signed between the EBRD and Ukraine in 2014. Proceeds from the loan will be used in strict compliance with the EBRD’s Procurement Policies and Rules, best European practice and the European Federation of Energy Traders documentation, as state the press office.
EBRD is the largest international financial investor in Ukraine. As of 1 September 2015, the Bank had a total cumulative commitment of €11 billion in 346 projects throughout the country.