Ukraine has changed the charter of Naftogaz in violation of a deal with foreign creditors, in a move that could hold up a $500 million loan for vital gas purchases from Europe, the state-run energy firm said on Friday (16 September).
“These funds are essential for gas purchases that will allow Ukraine to get through the winter season in a stable manner,” Naftogaz said in emailed comments.
The European Bank for Reconstruction and Development (EBRD) expressed concern on Friday after Naftogaz said the economy ministry transferred control of the company’s gas transport arm last week, in violation of corporate governance principles.
The ministry did not immediately respond to a request for comment.
Last October, the government approved a plan to reform the corporate governance of Naftogaz in exchange for loans worth $800 million from the World Bank and the EBRD to buy gas from Europe for the winter.
Naftogaz said on Friday that the charter change imposed by the ministry violated the terms of the energy firm’s loan agreement with the EBRD and could lead to a default on the debt.
The EBRD, which along with Ukraine’s other Western backers has urged the authorities to prioritise the restructuring of the graft-ridden energy sector, said Naftogaz must stick to the terms of the deal.
“The EBRD is looking into this, if the development is confirmed, this is a very serious matter. We do expect that our partners (Naftogaz Ukraine) will honour their commitments and continue building Naftogaz into an example of corporate governance reform,” an EBRD spokesman said.
Naftogaz, Ukraine’s largest energy company, operates in every part of the gas sector, from production to transport to sales.
Since last December, Ukraine has not bought any gas from traditional supplier Russia, instead importing gas from Europe. Last year, Ukraine produced 19.9 billion cubic metres of gas and imported 16.5 bcm, including 10.3 bcm from Europe.