EUR 10 million two-year committed local currency-denominated working capital loan to ERU Trading. EBRD funds will be used to support growing gas trading operations of ERU Trading in order to secure low cost gas from EU during summer season and store it in Ukrainian gas storages with further sale in Ukraine (primary option) or re-export to the EU (secondary option) during winter heating season.
Facilitate further development and competition at the Ukrainian gas trading market by means of supporting activities of transparent and efficient privately owned energy traders.
ETI score: 63
The proposed project supports a private, independent trader in competing with the dominant player, Naftogaz, in an increasingly liberalised market, and facilitates increased liquidity and competition on the private energy exchange UEEX following the MoU signed by the EBRD in July 2019.
The project also increases overall security of gas supply to Ukraine by diversifying supply from the EU; it provides for greater utilisation and integration of the country's transportation and storage infrastructure with the EU gas market.
ERU TRADING LLC
ERU Trading LLC is a Ukrainian energy and gas trading company established in 2016 with the launch of the largest and most successful gas market reform in Ukraine's history. Its core activities have been natural gas import and trade, electricity export and domestic supply.
EBRD Finance Summary
Total Project Cost
The EBRD will be the first IFI and international bank in the client's existing loan portfolio providing not only favourable financial terms (with an up to two-year transaction tenor and "committed" status of the facility), but also helping to mitigate the non-financial risks. The project will also support the promotion of gender equality as the client will be committing to the Women's Empowerment Principles developed by the UN and conducting a career event at a Ukrainian university.
Environmental and Social Summary
Categorised B (2019). Use of the loan proceeds will fund the gas trade activities only, which are low E&S risk. The Client has no fixed assets or activities associated with gas storage and transportation infrastructure, which are operated by the Ukrainian state-owned companies. Brief Environmental and Social Action Plan (ESAP) has been developed for the Company to address potential E&S issues associated with labour and grievance management, gender aspects, and to a limited extent the primary supply chain. ESD confirms that the project is considered aligned with the mitigation goals and adaptation goals of the Paris Agreement, as presented in the FRM and outlined in the attachment to the FRM. ESDD was completed using in house resources and comprised a review of a completed corporate questionnaire, existing E&S procedures, and follow up Q&As. The main possible E&S impacts are considered to be associated with the Client's administrative and sales personnel's social aspects. The Client has been found to be compliant with the local legislation pertaining to the social and labour issues of the Client's workforce. Current Project is for trading of natural gas only. The client does not own or operate any facility or infrastructure for transportation or storage of the gas. Therefore, no Associated Facilities or Existing Facilities are associated with this project. Nonetheless, as part of the appraisal of this project ESDD reviewed available information on the status of gas transmission and storage infrastructure owned by other entities/suppliers, where reporting was readily available from other Bank's Projects. Through other projects EBRD has agreed to ESAPs with Client's suppliers that were developed to structure their facilities to be compliant with EBRD PRs over time, and we can confirm that they are making progress in this regard. The Bank will monitor the project through the review of the Annual Environmental and Social Monitoring Reports.
Technical Cooperation and Grant Financing
Company Contact Information
+38 044 428 70 16
58, Yaroslavska Street,10th Floor, Kyiv, 04071, Ukraine
PSD last updated
19 Apr 2021
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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