Brussels, 12/10/2015 (Agence Europe) - On Monday 12 October, the European Investment Bank (EIB) and World Bank (WB) signed an agreement to facilitate the purchase of gas by Ukraine's national gas company, NJSC Naftogaz. The EIB will guarantee up to USD 520 million of selected World Bank loans in Ukraine, which will enable the World Bank to guarantee credit facilities for gas purchases by Naftogaz
EIB President Werner Hoyer commented “European and global institutions are committed to helping Ukraine avert a potentially severe energy crisis as winter approaches… The deal reflects the EIB's enduring support for Ukraine as part of EU cooperation with the country and the Union's Eastern Neighbourhood region”. World Bank Group President Jim Yong Kim explained “The new agreement is part of our broad support to the restructuring of the gas sector in Ukraine and it will contribute to adequate gas supplies for the next three years. The World Bank Group is committed to continue supporting Ukraine's ambitious reform programme and we are pleased to work jointly with the EIB”.
The new agreement is part of the support for Ukraine by the European Union and international financial institutions, under which the EIB guarantees World Bank investment development projects in Ukraine. The EIB guarantee is structured under the 2014-2020 External Lending Mandate and benefits from the EU comprehensive guarantee, a press release explained.
The EIB loans to Ukraine are part of the EU's support programme to Ukraine. In March 2014, the European Commission announced an EU support package amounting to €11 billion for 2014-2016 for Ukraine in grants and lending. For its part, the EIB is contributing to this package by lending up to €3 billion during 2014-2016, should political and operational conditions allow. This support focuses on energy and infrastructure investment as well as access to finance for SMEs. Since October 2014, the EIB has already contributed €1.8 billion, supporting a series of high priority projects in Ukraine.
The World Bank Group has provided in the last 18 months more than US$4.1 billion to Ukraine in budget support. This includes policy advice and technical assistance in formulating and implementing comprehensive structural reforms. These include, among others, reforms to: improve public sector governance and efficiency in the use of public resources and fight corruption; restore fiscal and external account balances; stabilize the banking sector; enhance the investment climate; restructure the energy sector; and strengthen the social safety net system to target assistance to the poor and most vulnerable.
Russian gas supplies resume. On the same day, the Russian gas company, Gazprom, announced that it had received an early payment from Naftogaz for USD 234 million out of the USD 500 million promised for paying October's gas supplies. Ukraine has called for higher supply nominations to the tune of 114,000,000 m³ a day, which corresponds to annual supply of 52 billion m³, explained Gazprom in a press release.
Under EU mediation, Russia and Ukraine agreed on 25 September to a binding protocol for an agreement for Russian gas supplies to Ukraine for the 2015/2016 winter, including commitments from the three parties to guarantee this supply (see EUROPE 11398). (Original version in French by Emmanuel Hagry)