WASHINGTON, October 18, 2016 – The World Bank’s Board of Executive Directors approved today a US$500 million guarantee from the International Bank for Reconstruction and Development (IBRD). This guarantee will help Ukraine’s Naftogaz, the national gas company, secure better commercial and financing terms to purchase the gas Ukraine needs to meet the demand of heating companies, households, power producers and industrial consumers. This is particularly key to ensure adequate gas imports for this winter.
Ukraine faces long and hard winters which make the reliability and security of gas supply essential for people. The guarantee is part of the World Bank Group’s support to wider reforms in the energy and gas sector to help Ukraine create an energy system that can deliver reliable and affordable energy services to families and industries. This includes support to implement structural reforms of Ukraine’s Naftogaz, and improve the targeting and delivery of subsidies effectively to the most vulnerable segments of the Ukrainian population.
“The guarantee the Bank’s Board approved today will help secure adequate gas supplies for the coming two years. It would also help improve the financing and contract terms for such gas purchases, which will ultimately benefit households in Ukraine,” said Satu Kahkonen, World Bank Country Director for Belarus, Moldova and Ukraine. “Ukraine has the potential to reduce its gas imports over time. To achieve that, the country needs to combine increased domestic production of gas with better investments in energy efficiency.”
The World Bank is Ukraine’s major development partner. Since May 2014, the World Bank has provided more than US$4.4 billion to Ukraine in development policy loans and investment projects. In 2015 alone, the Bank approved two investment operations and two development policy operations amounting to a total of US$1.775 billion.
The World Bank’s current investment project portfolio in Ukraine amounts to about US$2.8 billion in eight ongoing investment projects. The investments support improving basic public services that directly benefit ordinary people in areas such as water supply, sanitation, heating, power, energy efficiency, roads, social protection and healthcare, as well as private sector development. Since Ukraine joined the World Bank in 1992, the Bank’s commitments to the country have totaled over US$10 billion in about 70 projects and programs.
About the World Bank Group
The World Bank Group (WBG) is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC), the Bank’s private sector arm; the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.
