The European Bank for Reconstruction and Development (EBRD) is considering the provision of a $100 million loan for the Naftogaz Gas Purchase Facility 2 project, the bank said on Wednesday.
On its website, EBRD referred to the 'possible provision of up to $100 million in debt funding as part of a natural gas purchase revolving loan facility of up to $250 million.'
Naftogaz Gas Purchase Facility 2 project is 'a revolving gas purchase facility that allows Naftogaz to buy gas over a period of up to three years at the lowest price available during the summer months and build up reserves in its vast storage facilities for sale to Ukrainian residents and businesses in the fall and winter heating season when demand is high and gas supply is more scarce,' according to Naftogaz.
The bank explained that Goldman Sachs would arrange the gas purchase facility, which will be supported by the U.S. Overseas Private Investment Corporation.
'The facility is currently under negotiation and will be subject to approval by the parties,' the bank explained, adding that the EBRD expects that a board decision will be made on the provision of the loan on Sept. 5.
'The project offers competitive procurement, transparent pricing and is in line with the best EU practices,' the EBRD said.
Naftogaz mainly imports gas from Russia, but after Russia's Crimea annexation in 2014, the company halted direct gas imports from Moscow and instead imported from Europe.
Ukraine consumes around 32 billion cubic meters (bcm) of gas per year out of which 15 bcm is imported.
The country also stores gas for winter peak demand, and as of the July 31, its stored gas amounted to around 12.5 billion cubic meters.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr