Photo from UNIAN
International financial institutions, led by the World Bank, are preparing together a financing package worth $1 billion to help Ukraine and its energy giant Naftogaz fill up its natural gas storage facilities and avoid shortages in the conflict-ridden country as well as the rest of Europe over the winter, according to The Wall Street Journal.
The funding, which would come through a mix of loans and guarantees, would remove one of the central obstacles to another gas-supply deal between Kyiv and Moscow, according to the report.
The Wall Street Journal reports that European consumers receive up to 80 billion cubic meters of gas through Ukraine. EU officials hope that the financing package will be enough to buy 5 bcm of gas in the coming months, which will help increase the current reserves to about 19 bcm of gas, the amount, reporters say, enough for the upcoming winter season even at low temperatures.
According to The Wall Street Journal, the World Bank promised a loan of up to half a billion, with another $520 million in the form of guarantees pledged by the European Investment Bank. The corresponding decision has already been approved by the Bank's Board of Directors, the report notes.
On September 30, the EBRD Board of Directors will consider an issue on allocation of another $300 million for Naftogaz to finance gas purchases, while the additional EUR 200 million may be provided by German KfW Development Bank.
As UNIAN reported earlier, today, September 25, Ukraine and Russia intend to strike a deal through mediation of the European Commission to arrange supplies of Russian gas to Ukraine for the 2015-2016 heating season. The Russian side has already announced that Gazprom would not apply the "take or pay" rule to gas supplies to Ukraine. At the same time, the price for gas is said to be further negotiated.