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Naftogaz to repay $300 million to EBRD for gas purcase facility in January

Because of the problems in the cooperation with the IMF, the World Bank also expects not to extend the $500 million credit line
20:39, 18 January 2018

ubr.ua

The CEO of Ukraine’s national oil and gas holding Naftogaz Andriy Kobolev announced that the corporation expects to repay $300 million to the European Bank for Reconstruction and Development (EBRD) in January 2018 for a previously extended gas purchase facility, UNIAN reports.

Related: Naftogaz without wealth: Why did state take away gas and oil fields from its company?

“Some $300 million will be repaid to the EBRD this January. As far as we understand, there will be no automatic resumption of this credit line,” he said.

According to Kobolev, the possibility of non-resumption of lending from the EBRD and the World Bank is linked to Ukraine’s failure to comply with the requirements put forward by the International Monetary Fund (IMF).

Related: EBRD regrets dismissal of independent members of supervisory board from Naftogaz

“Because of the problems in the cooperation with the IMF, the World Bank also expects not to extend the $500 million credit line… The current strain between the government of Ukraine and the IMF will cost Naftogaz $800 million in low-cost credit resources at 1% annually,” he added.

The EBRD Managing Director for Eastern Europe and the Caucasus Francis Malige said at the beginning of October 2017 that the bank was prepared to extend the gas purchase facility for Ukraine and even increase in volume, but only after the work of the independent supervisory board of Naftogaz is resumed. The board was formed by a Cabinet decision in December last year and its first meeting occurred on 12 January 2018.

Related: Naftogaz risks to lose financing of EBRD and World Bank

In mid-December of 2017, IMF representatives said that Ukraine still had to satisfy a number of conditions to obtain a new disbursement.

According to the Fund, the government needs to adjust gas prices on the domestic market to import parity, which is expected to promote the development of a free gas market and encourage consumers to save energy. Additionally, the allocation of the next IMF tranche depends on the adoption of Ukraine’s legislation efforts on privatization and the anti-corruption court.

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