EBRD may provide Ukrenergo, Naftogaz with rapid EUR 300 million loan

25 October 2022, 06:26 PM
EBRD will support Ukrenergo and Naftogaz of Ukraine with additional loans (Photo:ebrd.com)

EBRD will support Ukrenergo and Naftogaz of Ukraine with additional loans (Photo:ebrd.com)

The European Bank for Reconstruction and Development (EBRD may grant Ukrainian electricity transmission system operator Ukrenergo an additional EUR 300 million loan for equipment and current liquidity, the Interfax-Ukraine news agency has reported.

Alternate Board Director at the EBRD Artem Shevalev announced the possibility of the new loan on Oct. 25. The announcement came a few days after a visit by EBRD President Odile Renaud-Basso to Kyiv on Oct. 21.

“One of the things that came out of this visit is the decision to allocate a EUR 300 million emergency loan to Ukrenergo within the next month,” Shevalev said on the side lines of the International Expert Conference on the Recovery of Ukraine in Berlin.

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Shevalev clarified that the decision still needs to be approved by the board of directors.

However, according to him, the speed of such a decision is unprecedented for an international financial organization.

“This is the speed of light,” he said.

“This decision was made at a pace I’ve never seen for all my years working at the EBRD. But we know the client, we know the needs and we want to do it. Again, EUR 300 million is quite a loan for one client, taking into account the fact that we already allocated EUR 150 million earlier.”

Shevalev said the funds will be directed primarily to the purchase of equipment necessary for the restoration of damaged power grids and support of the company’s current liquidity.

Shevalev noted the EBRD also continues to work on the allocation of funds to Ukraine’s state-owned oil and gas company Naftogaz of Ukraine for the purchase of gas.

“Unfortunately, with the selection of those EUR 300 million that were approved in the summer, there was a pause related to the restructuring of oil and gas bonds, but it has already begun,” he said.

“If I’m not mistaken, the first EUR 11 million were already selected last week.”

At the same time, he said the EBRD would provide Naftogaz with an additional EUR 200 million loan.

“We’re waiting for the Norwegian guarantee for this loan – the procedure within the Norwegian government must be completed,” Shevalev said.

“But EUR 200 million will be approved at most in early November.”

He added the EBRD operates according to the following scheme: Naftogaz purchases, the bank pays the supplier.

In mid-June 2022, the EBRD announced the decision to provide Naftogaz with a EUR 300 million loan for the purchase of gas, of which EUR 50 million had to be allocated urgently. EBRD guarantees 66% (EUR 200 million) of the total amount of the loan, which is also supported by Ukraine’s state guarantee.

The EBRD announced on Aug. 26 that it would provide Ukrenergo with a EUR 97.3 million loan to support liquidity amid Russia’s military aggression. Another EUR 50 million was allocated earlier.

The EBRD also plans to invest up to EUR 3 billion in Ukraine in 2022-2023 amidst Ukraine’s ongoing defense against Russian aggression.

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