The national JSC Naftogaz Ukrainy has signed with Citi and Deutsche Bank a loan agreement for a euro-denominated credit facility for gas purchase in the equivalent of $500 million secured by the World Bank.
The facility is secured by the World Bank’s guarantee, which, in turn, is secured by the sovereign guarantee issued as part of the formation of the energy fund according to resolution No. 876 of the Cabinet of Ministers of Ukraine dated November 30 2016 on the provision of the International Bank for Reconstruction and Development with the sovereign guarantee under obligations of NJSC Naftogaz Ukrainy, the national gas company’s press service reported.
The guarantee is valid for a term of four years, with two years available for gas purchase and two years for repayment. The guarantee of the World Bank and the credit facility are highly cost-effective compared to other loan agreements of Naftogaz. According to the funding conditions under the credit facility, Naftogaz will continue buying gas under existing eligible contracts, switching from pre-payment to post-payment terms.