The first fifteen letters of credit have been issued by Naftogaz under the loan agreement with Citi and Deutsche Bank secured by the World Bank.
The letters of credit totaling more than EUR 220 million will be used this March to purchase natural gas from the European suppliers selected through the World Bank’s biddings. It is planned to buy up to 1.1 bcm of gas. The suppliers will be receiving cash under the letters of credit during April upon completion of the relevant gas deliveries to Ukraine.
Naftogaz shall repay the loan within 12 months following the lending. The loan facility secured by the World Bank totals the equivalent of USD 500 million.
The rest of the loan facility will be used for gas purchases based on the current market conditions.
Background information: In 2015, Naftogaz received the revolving loan facility of USD 300 million from the EBRD to purchase gas from the European suppliers.
NJSC Naftogaz of Ukraine