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EBRD lends Naftogaz 200 million euros to build up strategic gas reserves

The European Bank for Reconstruction and Development (EBRD) announced on Thursday (23 November) that it is lending 200 million euros to Ukrainian state-owned energy company Naftogaz to build up strategic gas reserves for the current heating season.

“This is a very important step towards strengthening the energy stability of our country in wartime conditions. I am sincerely grateful to the EBRD and Matteo Patrone for their cooperation and consistent support of Ukraine in this difficult time,” said Oleksiy Chernyshov, CEO of Naftogaz.

This loan brings to fruition an agreement initially made in June at the Ukraine Recovery Conference in London, between EBRD President Odile Renaud-Basso and Ukraine’s Prime Minister Denys Shmygal.

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All EBRD investments in Ukraine involve risk-sharing with donors and partners, in this case with Norway and The Netherlands. “The people of Ukraine are facing another cold winter under Russian attack. Norway will continue our support to Ukraine to maintain critically important energy security and meet the needs for heating for homes, businesses and public institutions. We are proud to support these efforts by EBRD with 54 million euros,” said Norwegian Minister of Foreign Affairs Espen Barth Eide.

“The EBRD is a key partner for Norway’s five-year comprehensive support programme for Ukraine. So far, Norway has funded efforts by the EBRD within energy alone with 300 million euros in 2022-23,” added Minister Eide.

The EBRD has significantly increased its support in Ukraine since the Russian invasion, focusing on energy security, vital infrastructure, food security, trade and support for the private sector.

Last month the EBRD fulfilled its commitment to deploy three billion euros in Ukraine between 2022-23. Earlier in November, the bank’s directors asked the Board of Governors to approve a four billion capital increase to enable the EBRD to provide significant and sustained investment for Ukraine, raising its funding levels further when the time comes for full reconstruction.

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The Governors will make a final decision on the proposed capital increase by the end of 2023. As noted in a press release by the EBRD, the Governors “agree that support for Ukraine should be the Bank’s highest priority, now and in the future,” following the Russia full-scale invasion, whilst “also ensuring that the EBRD can continue to pursue its strategic priorities across all its economies of investment.”

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