NAK Gas Trade Facility

Location:

Ukraine

Project number:

51188

Business sector:

Natural resources

Notice type:

Public

Environmental category:

B

Status:

Cancelled

PSD disclosed:

25 Jun 2019

Project Description

Provision of one year letters of credit ("LCs") at the request of the National Joint Stock Company "NAK" Naftogaz of Ukraine" (the "Company" or "NAK").

The total amount of LCs will be up to an aggregate maximum of EUR 60 million at any point in time and be earmarked to back-up a minor portion of NAK's payment obligations under annual gas import contracts with reputable gas suppliers.

Project Objectives

The purpose of the transaction is to allow NAK to procure gas for the next winter season through private gas trade facilities with reputable gas traders and without recourse on sovereign guarantee.

EBRD support in the form of LC will cover up to 20%-30% of the NAK payment risk arising from gas trade finance.

The transaction will contribute to Ukraine's energy security, ensuring efficiency of the markets, the development of direct business relationships with the Ukrainian gas network and storage operators and working with summer and winter business cycle in the Ukrainian gas market in line with the EU markets best practices.

Transition Impact

Good

The transition impact of the project will stem from the following transition impact qualities:

Competitive quality through attracting additional large international traders into the Ukrainian gas market with direct access to the gas network and storage dominated by the state incumbent. The project will also contribute to the Integrated quality by demonstrating the possibility to cross border gas trade and new ways of working with winter and summer business cycles linked to the European hubs pricing and sound business practices.

Client Information

NAFTOGAZ OF UKRAINE PJSC

Naftogaz is a 100% State-owned company with Cabinet of Ministers of Ukraine acting as nominated shareholders of behalf of the state. Naftogaz is the holding of a vertically integrated group of entities with activities including oil and natural gas production, transportation and storage, refining and supply.

EBRD Finance Summary

EUR 60,000,000.00

LCs in the amount of EUR 60 million

Total Project Cost

EUR 60,000,000.00

LCs in the amount of EUR 60 million

Environmental and Social Summary

The Environmental and Social appraisal of this project is ongoing and this PSD will be updated with results of this appraisal when completed.

Technical Cooperation

None.

Company Contact Information

Borys Glavatskyi
GSA_tender@naftogaz.com
+38 044 586 34 19
www.naftogaz.com
B. Khmelnitskogo St., 6 Kyiv, 01601, Ukraine

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