The revolving three-year facility will be used by National joint-stock company Naftogaz Ukrainy to buy about 1.1 billion cubic meters (bcm) of gas to fill up Ukraine’s strategic storage facilities, ahead of the winter months.
EBRD vice-president and COO Phil Bennett said: "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."
EBRD said that the loan, however, is tied to corporate governance reforms at Naftogaz, including the creation of a supervisory board of independent and qualified directors, in order to increase the company’s operating efficiency.
Additional changes include the introduction of internal audit, compliance, anti-corruption and risk management functions and an ownership and governance structure.
The gas will be imported by Naftogaz via EU-Ukraine interconnectors, through reverse flow.
EBRD energy and natural resources managing director Riccardo Puliti said: "A public tender, which follows the EBRD public procurement rules, is under implementation and should ensure both efficiency and transparency to the whole purchase exercise."
The loan is part of the international community’s effort to support diversification of natural gas suppliers and delivery routes in order to strengthen energy security in Ukraine.
The new funding comes on heel of recently granted $300m by EBRD to Naftogaz to buy natural gas for the winter period.
In September, the European Commission, Russia and Ukraine had signed a deal for gas supply to Ukraine for the upcoming winter period from the 1st of October until the end of March 2016.
Image: EBRD and Ukrainian officials during Ukraine-Germany business forum. Photo: courtesy of European Bank for Reconstruction and Development.
