The Government authorized Minister of Finance to ink the Treaty of Credit Guarantee of the World Bank

The Cabinet of Ministers of Ukraine authorized the Minister of Finance Olexandr Danyliuk to ink the Treaty of Guarantee for the redress of the credit for the purchase of gas between Ukraine and the International Bank for Reconstruction and Development (the World Bank). The Government also approved the composition of the delegation.

The decision on the provision of $ 500 million for JSC Naftogaz Ukrainy to buy natural gas was adopted by the Board of Directors of the World Bank on 18 October 2016. Fundraising will occur under the Credit agreement which will be concluded between JSC Naftogaz Ukrainy and the City and Deutsche banks.

Thanks to the active cooperation of the Ministry of Finance and Naftogaz the attracted funds will be provided on favorable to Naftogaz terms. The existence of guarantees of the IBRD reduces risks to borrowers and allows lenders to provide funds at a lower interest rate.

Raising the credit under the guarantee of the IBRD will allow Ukraine to buy enough volume of gas for the heating season 2016-2017. The credit will be used to ensure stable and smooth provision Ukrainians with warm during the winter months.

The agreement of guarantees for the credit from the World Bank achieved in the framework of the successive energy reform which had enabled us to reduce the deficit of JSC Naftogaz Ukrainy from more than $10 billion to zero.

Reference

Conditions of the Guarantee

- amount of the Guarantee –$ 500 million

- fee for provision of the guarantee - 0.5% per annum of the amount of the Guarantee provided by the IBRD

- fee for the reservation - 0.25% per annum of the amount of the Guarantee provided by the IBRD

- one-time fee - 0.25% of the amount of the IBRD guarantee;

- issuing fee - 0,15% of the amount of the IBRD guarantee

- fee for registration - 0,10% of the amount of the IBRD guarantee.

All the above fee to be paid by JSC Naftogaz Ukrainy.