Naftogaz secures additional €500 million EBRD loan for gas purchases

Naftogaz of Ukraine and the European Bank for Reconstruction and Development (EBRD) have signed a new revolving credit agreement worth €500 million, according to Naftogaz’s press service.

The funds will be used to finance natural gas purchases in preparation for the next heating season, primarily for gas imports. According to ExPro estimates, this amount could cover almost 1.5 bcm of natural gas at current European gas prices (around €32.6/MWh).

Naftogaz noted that this is the largest project the EBRD has ever signed in Ukraine and one of the largest in the bank’s history overall.

For the first time, the loan is provided under an EU guarantee through the UIF Hi-Bar (Ukraine Investment Framework) programme, which will not require a state guarantee from Ukraine.

“We are proud to support Naftogaz with this new loan – the largest we have ever signed in Ukraine. Our financing supports Ukraine’s energy security – a key priority of our investments in the country – and will help ensure Ukrainians have heat and power this winter and beyond,” said Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova.

Naftogaz will purchase gas on competitive terms from more than 30 pre-qualified suppliers under contracts concluded in line with the standards of the European Federation of Energy Traders (EFET).

As reported by ExPro, Naftogaz has signed loan agreements with Ukrainian banks to raise funds for natural gas imports: with PrivatBank and UGB Ukrgasbank.