UNIAN
The Cabinet of Ministers of Ukraine has approved the raising of a loan worth $3.656 billion from the China Development Bank, Ukrainian newspaper ZN.UA has reported, referring to a report from the company’s press office.
This loan is to be provided to Naftogaz under government guarantees. By 2016 the finalization and financing of several projects is planned to be launched.
In accordance with the terms of the agreement, 60% of the credit line will be used to purchase equipment from China, with 40% channeled to the Ukrainian industry to improve the efficiency of its mechanical engineering sector.
Cooperation in the gas sector between Ukraine and Russia has fallen off sharply since Russia invaded and annexed the Ukrainian territory of Crimea in March 2014, and then launched a “hybrid war” attack in eastern Ukraine in April of the same year.
With relations strained between Moscow and Kyiv, Naftogaz has had to seek other sources of financing for its development, as its creaking gas transport system is badly in need of renovation. Kyiv has sought funding from the EU and plans to set up a company to manage its gas transport system that will be part foreign-owned, though not by Russian companies.
Maintaining a lever of influence or control on Ukraine’s gas transport system is thought to be one of the main motivations behind the Kremlin’s intervention in Ukraine.