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Ukraine receives Fuel Loan Facility from the EBRD
As part of its continuing support for Ukraine’s energy sector reforms, the EBRD is providing a US$ 100 million (€111.9 million) loan as a seasonal working capital facility to four government-owned thermal generating companies. The proceeds will be used to purchase fuel stock (coal and crude oil) for this coming winter.
"The EBRD extends the loan at a particular, and probably unique, confluence of circumstances," said Johan Bastin, Business Group Director for Infrastructure at the EBRD and co-chairman, with the Deputy Prime Minister, of the joint Task Force on Energy Sector Reform in Ukraine. "Energy sector reforms in Ukraine – while still fragile and in their early stages – have started to show results. The Government seems intent on continuing these reforms, and through this operation the Bank aims to support and strengthen the momentum of reform. The EBRD loan has been made on the back of the Government’s immediate reform programme, which includes the privatisation of seven regional distribution companies and substantial and lasting increases of cash collection."
At the signing in Kiev today, Mr Igor Mityukov, Minister of Finance, said: "Our cooperation with the EBRD has yet again proved to be remarkable and we are very pleased the Bank has agreed to provide this facility. The conditions of loan agreement signed today demonstrate Government’s commitment to reforms."
The Bank’s operation and associated conditionality specifically focus on reforms that underpin the financial viability of the loan; these will enable the four generating companies to repay the loan from user charges and pave the way for continued EBRD investment in privatised distribution companies.
Disbursements will be made against supply contracts won by fuel suppliers through a process of tender following the EBRD’s procurement rules.
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