As part of efforts to support the Ukrainian economy and promote reforms, the EBRD is providing a loan of up to €150 million to finance the upgrade and repair of a key section of Ukraine’s gas transmission system.
The sovereign loan will be on-lent to a subsidiary of NAK Naftogaz, the national oil and gas holding company, for modernisation work on the 120 km-long western part of the Urengoy-Pomary-Uzhgorod pipeline. The pipeline transports gas from Russia towards European markets and allows for reverse gas flows from the EU to Ukraine, which has the largest gas storage capacity in Europe.
In addition to reducing gas losses by one-fifth, the project will improve the corporate governance of Naftogaz and its subsidiary and the Ukrainian government has committed to reforms in the gas market as part of the transaction. The pipeline modernisation programme is also supported by a €150 million loan from the European Investment Bank.
US$ 600 million:
expected cost of the modernisation project
The EBRD is the
largest financial investor