European Commission provides EBRD with guarantees in 500-million-euros loan for Ukraine's gas supply system

BRUSSELS. Aug 13 (Interfax) - The European Commission signed on Wednesday a guarantee agreement with the European Bank for Reconstruction and Development (EBRD) enabling a loan in the amount of 500 million euros "for Ukraine's energy security," the European Union's Delegation to Ukraine said.

"The financing will allow the state-owned company Naftogaz of Ukraine to finance emergency gas purchases. The [European] Commission will guarantee 90% of the loan within the amended HI-BAR [Highly Integrative Basic and Responsive] program financed under the EU's Ukraine Investment Framework," the delegation said in a statement published on its website.

"Replenishing the depleted gas reserves of Ukraine with the help of this financing package will be key to allow the country's critical infrastructure and population to access energy sources during the winter," the statement said.

Naftogaz will purchase natural gas on competitive terms, it said.

"Upon reimbursement of the 2-year loan, the EBRD and the Commission will reallocate the available guarantee coverage to capital investment projects enabling long-term private and public investments, for instance in the renewables sector," it said.

The Ukraine Investment Framework is part of the fund for Ukraine worth 50 billion euros aimed at attracting state and private investments for Ukraine's restoration and reconstruction, it said. The platform has financial instruments worth 9.3 billion euros in total, including guarantees for loans totaling 7.8 billion euros and mixed financing of 1.5 billion euros.

"The aim of the Ukraine Investment Framework is to mobilize 40 billion euros of investments for the recovery, reconstruction, and modernization," it said.