Ukraine’s Ukrnafta, EBRD sign EUR 80 mln loan agreement

Ukraine's largest oil and gas company, Ukrnafta, and the European Bank for Reconstruction and Development (EBRD) signed an EUR 80 million loan agreement on Friday in London, the Ministry of Economy of Ukraine announced.

The financing will cover the delivery and installation of gas-fired distributed power plants and cogeneration units with a combined capacity of approximately 100 MW in various Ukrainian regions.

"This agreement marks the first step in a major investment package for public and private companies, approved by the EBRD's Board of Directors on December 4. The EUR 80 million loan granted to Ukrnafta will facilitate the construction of new, modern gas generation capacities that will enhance Ukraine's energy resilience," said Ukraine's First Deputy Prime Minister and Minister of Economy, Yulia Svyrydenko.

Additionally, the EBRD loan will be co-financed with investment grants of EUR 9.5 million from the Netherlands and EUR 12.5 million from the United States, allocated through an EBRD special fund. These grants will enable Ukrnafta to develop additional distributed gas generation capacities.

"In the face of ongoing Russian attacks on energy infrastructure, these new facilities will play a critical role in meeting immediate energy demands and ensuring long-term stability," Ukrnafta CEO Serhiy Koretsky wrote on Facebook.

He noted that the EBRD partnership represents not only a financial boost but also recognition of Ukrnafta's transformation into a transparent company adhering to OECD corporate standards and demonstrating strong financial performance.

"The beginning of cooperation with the EBRD marks a new chapter for Ukrnafta, reflecting the dedication of the state management team and our 20,000-strong workforce. It signifies that Ukrnafta meets the EBRD's high standards for its clients, having passed extensive due diligence and compliance procedures," Koretsky added.

Ukrnafta is Ukraine's largest oil extraction company and operates a national network of filling stations. In March 2024, the company took over the management of Glusco assets, and now operates 547 filling stations – 462 of its own and 85 under management.

The company is implementing a comprehensive program to renew operations and modernize the format of its filling stations. Since February 2023, Ukrnafta has been offering its own fuel vouchers and NAFTA Cards, which are sold to both legal entities and individuals through Ukrnafta-Postach LLC.

Ukrnafta holds 92 licenses for industrial development of deposits. It has 1,832 oil and 154 gas production wells on its balance.

The largest shareholder in Ukrnafta is Naftogaz Ukrainy, which holds a 50% plus one share. In November 2022, the General Staff of the Armed Forces of Ukraine decided to transfer the corporate rights of the company, previously owned by private shareholders, to the state. The Ministry of Defense now oversees these shares.