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EBRD’s latest loan to increase Ukraine’s natural gas production

The European Bank for Reconstruction and Development (EBRD) is stepping up efforts to transform Ukraine’s energy sector. A 51.9 million euros sovereign loan to Ukrgasvydobuvannya (UGV), Ukraine’s largest natural gas producer and fully owned by Naftogaz, will increase domestic natural gas production, reduce the country’s dependency on imports and improve the efficiency and transparency of the sector.

“We are actively changing Naftogaz’s internal processes to mitigate the crisis within the industry,” said Naftogaz CEO Andriy Kobolyev. “International investments have a crucial role to play in achieving energy independence, especially under the current unfavourable price climate. Signing this agreement with the EBRD is another step towards strengthening the country and further evidence of successful corporate governance reform at Naftogaz. We are open and efficient, which is why international partners trust us. This cooperation is a powerful sign to other foreign investors that they can and should invest in Ukraine, even in today’s trying times.”

UGV, which is responsible for 75 per cent of domestic gas production, will receive the EBRD loan in two tranches. Up to 36.4 million euros will be used to finance the procurement of workover rigs, which will help increase natural gas production at existing fields. The remaining 15.5 euros million will be used for the introduction of innovative Organic Rankine Cycle waste-heat recovery systems at UGV’s site in Lokachi, in the western part of the country.

“Our mission is to move the country closer to energy independence.,” explained Ukrgasvydobuvannya CEO Olena Kobets. “Additional workover rigs will improve our efficiency and performance at depleted fields. The new equipment will enable us to perform complex deep operations, maintaining production and increasing hydrocarbon reserves. The energy efficiency project will help use the energy from produced hydrocarbons efficiently and decrease any negative impact on the environment, which is one of our priorities.”

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