Companies@UA: База компаний Украины

Brussels, July 31 (Interfax-Ukraine) – The European Commission and international financial institutions are considering the financial support of the reform of Ukraine's gas sector and oil and gas giant NJSC Naftogaz Ukrainy in particular.

This is stipulated in a joint statement of intent by the European Commission and international financial institutions, available to Interfax-Ukraine on Friday.

In particular, the European Bank for Reconstruction and Development (EBRD) is ready to consider extending a sovereign-guaranteed loan to NJSC Naftogaz Ukrainy, which will provide the company with working capital for immediate gas storage requirements and longer term finance to support an investment program for the rehabilitation of the existing gas transit system.

"Subject to detailed due diligence, funding of up to $300 million for immediate working capital and, in 2010, up to $450 million for investment could be proposed for decision to the Board of the EBRD," reads the statement.

The World Bank in turn will consider providing budget support to the Ukrainian government through a Development Policy Loan (DPL 4) sized preliminary and subject to confirmation up to $500 million aimed at supporting cross-sectoral fiscal and structural reforms, including in the gas sector, targeted social assistance for the vulnerable population, and public procurement. The DPL4 will be considered by the management of the World Bank immediately upon the satisfactory completion of all the reform measures agreed with the government in the matrix of development policy of this operation, and subject to the Stand-By Arrangement with the International Monetary Fund being on track.

The European Investment Bank (EIB) also confirms its willingness to consider sovereign guaranteed long-term loans to support and co-finance the rehabilitation and upgrade of the existing gas transit system.

According to the statement, the EIB underlines its statutory position regarding financing long-term investments rather than short-term working capital or trade gas. Subject to due diligence, up to $450 million for long-term investment could be proposed for decision to the Board of the EIB.