The Board of Directors of
the European Bank for Reconstruction and Development (EBRD) has approved a loan
worth up to $300 million to NJSC Naftogaz of Ukraine for buying natural gas on
the European market to fill storages for the winter heating period
"The
loan will strengthen Ukraine's energy security by supporting diversification of
natural gas suppliers and delivery routes," the EBRD said in the
statement.
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.
Both projects are designed to stimulate reforms in the
Ukrainian gas market that will help move the sector towards best practice in
market-based principles and liberalization. They will strengthen corporate
governance at Naftogaz and introduce greater transparency and efficiency in its
purchases of natural gas. 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.
"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,"
EBRD Managing Director for Energy and Natural Resources Riccardo Puliti said.
Technical assistance for the implementation of a
Corporate Governance Action Plan for Naftogaz is provided by the EBRD-Ukraine
Multi-Donor Account established at the Bank in 2014, and funded by Finland,
France, Germany, Netherlands, Sweden, Switzerland, the United Kingdom, the
United States, Denmark, Japan and Norway.
The EBRD is the largest international financial
investor in Ukraine. As of September 1, 2015, the Bank had a total cumulative
commitment of EUR 11 billion in 346 projects throughout the country.
NJSC Naftogaz of Ukraine is a state-owned Ukrainian
holding company consisting of a vertically integrated group of businesses
active in oil and gas production, transportation, storage and refining as well
as the supply of fuels.
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