Naftogaz, EBRD sign credit agreement worth $300 mln
National joint-stock company Naftogaz Ukrainy has signed an agreement to issue a credit of $300 million to finance the purchase of gas with theс for Reconstruction and Development (EBRD), the press service of the state holding has reported.
The press service said that the agreement was signed on October 23, 2015 in Berlin by Naftogaz Board Chairman Andriy Kobolev and Managing Director on the Power and Energy and Natural Resources Sectors at the EBRD Riccardo Puliti.
In addition, Finance Minister of Ukraine Natalie Jaresko and First Vice President and Chief Operating Officer Philip Bennett signed the state guarantee agreement on the provision of the credit.
The press service said that the credit funds of $300 million will be used to buy around 1 billion cubic meters of gas on the western border of Ukraine. The EBRD's loan is a three-year renewable credit. During the period, Naftogaz can return and re-borrow funds within the sum to finance the advance payment for gas before the winter periods.
It is unique for the EBRD to provide this type of credit, as the renewable credit mechanism with state guarantees is to be used first, the holding said.
One of the conditions for the provision of the EBRD credit is the realization of the action plan to reform the corporate management of Naftogaz Ukrainy by the government. With the signing of the agreement guarantees, Ukraine has taken on a liability to realize the plan.
"The long overdue reform of the corporate management at Naftogaz is focused on the increase of the share cost in the interests of Ukrainian citizens. The independent supervisory board and the improved control mechanisms would promote the increase in efficiency and transparency of the group's operation. When the plan is realized, it would show that even a company with the inefficient management could change, seriously having a dig into reformation," reads the report, citing Kobolev.
Naftogaz said that during the preliminary qualification process in line many international suppliers expressed their interest in gas supplies to Ukraine on the EBRD conditions. Gas will be supplied on the basis of the EFET standardized contracts.
According to Interfax-Ukraine's information, the credit rate is 1.5% per annum.
