Naftogaz of Ukraine has signed a €500mn ($548mn) revolving loan agreement with the European Bank for Reconstruction and Development, the largest project the EBRD has ever undertaken in Ukraine and among the largest in its history. The financing will be used to purchase natural gas.

“I thank the EBRD and all partners for their trust and support. I am grateful to the Government of Ukraine for its efforts aimed at strengthening Naftogaz’s capabilities,” CEO Sergii Koretskyi said in Kyiv on August 13.

“This is a clear signal that our partners understand the scale of the threat posed by Russia. Energy security today and energy independence in the future are our strategic priorities.”

The loan is the first to be provided under a European Union guarantee within the UIF HiBar programme and will not require a sovereign guarantee from Ukraine.

“For the first time, such a loan is provided under EU guarantee, without a Ukrainian state guarantee. This will allow Ukraine to better prepare for the heating season and provide Ukrainian homes with heat and light even on the most difficult days of winter,” Ukraine’s Prime Minister Yuliia Svyrydenko said in a post on social media.

“We are proud to support Naftogaz with this new loan – our largest ever signed in Ukraine,” said Arvid Tuerkner, EBRD Managing Director for Ukraine and Moldova.

“Our financing supports Ukraine’s energy security – a key priority for our investments there – and will help ensure Ukrainians have sufficient energy and heating this upcoming winter and beyond.”

Naftogaz Group will use the funding to buy gas on competitive terms from more than 30 prequalified suppliers. The contracts will follow the standards of the European Federation of Energy Traders, an organisation representing more than 120 European companies and aiming to increase transparency and efficiency in the European energy market, promote competition, and ensure a reliable energy supply.