The European Bank for Reconstruction and Development (EBRD) is lending Ukraine’s state-owned gas giant Naftogaz €270 million ($307 million) to finance emergency gas purchases for the next two heating seasons.
The amount of gas Naftogaz will purchase with it is unknown for now, EBRD Vice President Matteo Patrone told Kyiv Post.
“We don’t know [how much gas Naftogaz will import]. It depends on the price of gas,” Patrone said.
This collaboration will help to ensure Ukraine has sufficient gas reserves and can meet its energy needs during peak demand, Patrone said.
EBRD has previously said it was working on an agreement with Ukraine’s state-owned gas production company Naftogaz – the company is aiming to secure cash to import gas to secure heating and electricity for households, businesses and industry.
The loan from EBRD will be in addition to a grant from the Norwegian government of €138.6 million ($149.6 million). It will be funded through the EBRD Crisis Response Special Fund.
The exact timing and volumes will depend on the length and intensity of the war, among other factors, EBRD wrote in a press release.
“The situation in Ukraine remains fluid and may require Naftogaz, as Ukraine’s supplier of last resort, to quickly procure more critical gas imports,” the press release says.
Russia attacked Ukraine’s gas generation this year, although the impact was smaller compared to the heavy damage done to thermal power plants.
Russian strikes on Ukrainian gas infrastructure in recent months have allegedly deprived Ukraine of 50% of its domestic production, meaning the country will need to import more gas for the heating season from European partners.
Ukraine has restored half of its production capacity, but further investment is needed in both gas storage volumes and infrastructure.
EBRD keeps energy as one of its major focuses for financial programs, alongside infrastructure (transport and municipal), agribusiness, food security, and private sector resilience.
“Energy is going to remain an extremely important priority,” Matteo Patrone said in a meeting with reporters in Kyiv on April 7.
The EBRD has invested over €2 billion ($2.3 billion) in Ukraine’s energy sector since Russia invaded in 2022.