Ukraine to receive financial help for gas
Doris Leblond
OGJ correspondent
PARIS, Aug. 7 -- Ukraine will receive some of the financial help it has been seeking to pay for Russian natural gas under an international agreement that eases European fears about supplies transiting the country.
A dispute over payment by Ukaine to Russia for gas caused a 2-week disruption to European deliveries of Russian gas last January. Ukraine has been seeking a $4.2 billion loan (OGJ, July 6, 2009, Newsletter).
The European Commission, European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), and World Bank have agreed to cooperate on a support package to help Ukrainian authorities develop "sustainable solutions to Ukraine's medium-term gas transit payment obligations," and to continue to "support Ukraine's economic stabilization reform, including reform of the gas sector and accompanying reform of the social safety net," according to a joint statement by the organizations.
The statement said EBRD will consider sovereign-guaranteed loans of as much as $450 million to Ukraine’s Naftogaz Ukrainy for working capital for immediate gas storage and longer-term investments to rehabilitate the gas transit system.
The World Bank will consider committing as much as $500 million “aimed at supporting cross-sectoral fiscal and structural reforms, including the gas sector, targeted social assistance for the vulnerable population, and public procurement.”
The EIB will consider sovereign-guaranteed long-term loans totaling up to $450 million for rehabilitation and upgrade of the gas transit system.
The package includes technical assistance.