The revolving three-year facility will be used by the firm to boost gas storage while strengthening the country’s energy security, support sector reforms and improve its performance and governance.
In 2014, EBRD granted up to €150m loan to upgrade and repair a key section of Ukraine’s gas transmission system, the western part of the Urengoy-Pomary-Uzhgorod pipeline, which is designed to transport Russian gas towards European markets.
The pipeline also allows gas flows from the EU to Ukraine.
NAK Naftogaz subsidiary Ukrtransgaz was responsible to undertake the upgrades in order enhance the efficiency and safety of the 120km of the pipeline whilst reducing gas loss during transportation by a fifth.
The financing was also intended for upgrade to a gas compression station in the town of Romny, Ukraine.
The two projects are aimed to help improve transparency and efficiency in purchasing natural gas by the company.
EBRD energy and natural resources managing director Riccardo Puliti said: "This project is another important landmark in the reform of Ukraine’s gas sector.
"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."
On 25th Sept, 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.
As per the deal, Ukraine assured gas transit to Europe through its country as well as including injecting 2 bcm of natural gas into underground storage still in October 2015 while Russia agreed to lower gas prices for Ukraine.
EU vice president Å efcovic then said: "The agreement on the terms of the new Winter Package is a crucial step towards ensuring that Ukraine has sufficient gas supplies in the coming winter and that there is no threat to the continued reliable gas transit from Russia to the EU."
Image: Naftogaz intends to purchase natural gas to meet boost storages for the winter heating period. Photo: courtesy of The European Bank for Reconstruction and Development.
