The European Bank for Reconstruction and Development (EBRD) is lending Ukraine’s state-owned gas giant Naftogaz €500 million ($586 million) to finance emergency natural gas purchases for the next heating season and beyond.
“The deal is the largest project the EBRD has ever signed in Ukraine and among the largest in its history,” CEO of Naftogaz Sergii Koretskyi wrote on Facebook.
The EBRD’s press release states that “this is the Bank’s largest single loan facility in Ukraine.”
Naftogaz will purchase gas from more than 30 pre-qualified suppliers under contracts based on European Federation of Energy Traders standards, Naftogaz reported in its press release on Aug. 13.
This is the first EBRD loan to Naftogaz backed by an EU guarantee under the Ukraine Investment Framework. It forms part of the €50 billion EU Ukraine Facility designed to attract public and private investments for the recovery and reconstruction of Ukraine.
The loan does not require a sovereign guarantee from Ukraine since the EU guarantee covers 90% of the loan.
The loan follows major Russian attacks in the first half of 2025 on Naftogaz’s gas production and processing facilities, which caused significant output losses. The company is rebuilding damaged infrastructure, while demand for imports grows, the EBRD reported in its press release.
As of April, Russian strikes on Ukrainian gas infrastructure are understood to have deprived Ukraine of 50 percent of its domestic production, meaning the country will need to import more gas for the heating season from Europe.
Since then, Ukraine has restored half of its production capacity.
Since the start of Russia’s full-scale invasion in 2022, the EBRD has provided four financing packages to Naftogaz, totalling €1.6 billion (almost $1.9 billion). This includes €1.3 billion ($1.5 billion) in loans and €330 million ($387 million) in grants from Norway via the EBRD.
The transaction also supports Ukraine’s efforts to integrate its gas market with the EU. Energy security remains one of its five investment priorities in Ukraine, alongside infrastructure, food security, trade and private sector support, the EBRD reported.
The Ukraine Investment Framework, part of the EU’s $58.6 billion Ukraine Facility for budget and reform support, backs the loan and aims to mobilise €40 billion ($47 billion) for Ukraine’s recovery, reconstruction, and modernisation.
Naftogaz pursues diverse measures to secure gas supply in winter
The EBRD is not the only partner to help Naftogaz restore operations after Russia’s energy strikes.
In preparation for the winter heating season, Naftogaz also took out a Hr.4.7 billion ($113 million) loan from Ukrgasbank, Ukraine’s state-owned bank specializing in energy.
Naftogaz previously announced a Hr.4.7 billion ($113 million) loan from PrivatBank, also for the heating season. It is relatively new for PrivatBank to lend such a large amount, as the bank started providing credits for large enterprises only a year ago, previously focusing on small and medium-sized enterprises (SMEs).
Naftogaz recently secured 140 million cubic meters of liquefied natural gas (LNG) from the US to be transported by the Polish company ORLEN. That deal marks the fourth gas supply contract signed by Naftogaz this year, bringing the total shipped to 440 million cubic meters of LNG ahead of the winter heating season.
Apart from LNG, the state-owned company is speeding up gas injection into Ukraine’s underground storage facilities. By the start of the next heating season – Nov. 1 – Ukraine needs to accumulate at least 13 billion cubic meters of gas in storage. It has just over 9 billion cubic meters stored as of July 17, according to ExPro data.