The Ukrainian government is not meeting its commitments to the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the World Bank on raising loans for Naftogaz Ukrainy, so the talks on the loans have been frozen, a representative for President Viktor Yushchenko said.
“The failure to meet its commitments to reform the gas sector has
led to the point that as of October 2, when there was a meeting of the
NBU [National Bank of Ukraine], the situation was frozen,” Bohdan
Sokolovsky, the presidential representative for international energy
security, said at a press conference on Tuesday.
Sokolovsky said he doubted the negotiating process could be unblocked so that Naftogaz can receive the loans.
It was reported earlier that the European Commission and the
international financial institutions said on July 31 following talks
with Ukraine that they might provide financing to Naftogaz. The EBRD
said it was prepared to examine the issue of providing two loans to
Naftogaz, one of up to $300 million and another of up to $450 million.
In mid-September the EBRD said that it would consider allocation of
a $300-million loan for Naftogaz at a meeting on November 17. The loan
would be used to replenish working capital in order to purchase gas
that would be paid for at the end of the heating season.
In addition, the World Bank planned to consider a Development Policy
Loan for Ukraine totaling up to $500 million. The money would be
earmarked for supporting budgetary and structural reforms, including
reform of the gas sector, targeted social support to the most
vulnerable social groups and state purchasing.
The EIB had confirmed plans to consider a long-term loan totaling up
to $450 million targeted at supporting and co-financing renovation of
Ukraine’s gas transportation system. The EIB said that its financing
was aimed at long-term investment and not replenishment of working
capital or gas purchases.
