The European Investment Bank (EIB) and World Bank (WB) have signed an agreement under EU guarantee supporting the purchase of gas by Ukraine’s national gas company, Naftogaz.

According to the agreement, the EIB will guarantee up to US$520mn of selected World Bank loans in Ukraine, which will enable the World Bank to guarantee letter of credit facilities for gas purchases by Naftogaz. The deal was facilitated by a counter-guarantee of the European Union under the 2014-2020 external lending mandate to support development projects in Ukraine.

“European and global institutions are committed to helping Ukraine avert a potentially severe energy crisis as winter approaches. The guarantee agreement we signed today will facilitate Ukraine’s purchase of gas at a critical time. The deal reflects the EIB’s enduring support for Ukraine as part of EU co-operation with the country and the Union’s eastern neighbourhood region,” says Werner Hoyer, EIB president.

“The new agreement is part of our broad support to the restructuring of the gas sector in Ukraine and it will contribute to adequate gas supplies for the next three years,” comments World Bank president Jim Yong Kim. “The World Bank is committed to continue supporting Ukraine’s ambitious reform programme and we are pleased to work jointly with the EIB.”