By Lucia Sconosciuto
Canada and EBRD support Naftogaz, Ukraine’s state-owned gas company, with finance and risk-sharing support to maintain operations despite Russian invasion
Canada signs first dedicated guarantee of €36.5 million(US$35.48million) to enable, together with others, a €300 million EBRD loan to support critical gas purchases for Ukrainian households and businesses before winter.
The European Bank for Reconstruction and Development (EBRD) and the Government of Canada continue their partnership to support Ukraine’s state-owned gas company, Naftogaz (NAK), so it can deliver critical energy to Ukrainian customers over the winter heating season.
Canada, a founding member of the EBRD and an important contributor to its work, signed an agreement to enable, together with others, a €300 million EBRD loan to NAK. In doing so, Canada will provide a €36.5 million guarantee to help compensate for the loss of natural gas production due to Russia’s invasion of Ukraine.
The timely contribution will support NAK in purchasing gas ahead of the winter season to secure heating in households, schools and offices, to produce electricity and to keep the economy going.
“Canadians are firmly committed to supporting the government and people of Ukraine in their fight against Vladimir Putin’s illegal and barbaric invasion,” said Canada’s Deputy Prime Minister and Minister of Finance, Chrystia Freeland. “With this €36.5 million loan guarantee, Canada is supporting the EBRD to offer a €300 million loan which will help Ukraine purchase the heating fuel it needs before winter. It is Canada’s strong conviction that Ukraine must win this war to defend its sovereignty, democracy, and the rules-based international order.”
“We are extremely grateful for this important contribution from Canada which reaffirms our long-standing partnership and sees us united in supporting Ukraine, its people and its economy ahead of a very difficult winter. The EBRD is on track to invest over €1 billion in Ukraine this year and none of this would have been possible without the strong support of donors like Canada,” the EBRD’s President, Odile Renaud-Basso, said. To address the Ukrainian economy’s most pressing needs, the EBRD is prioritising trade finance, energy security, vital infrastructure, food security and providing liquidity to pharmaceutical companies. Investments in all areas will involve risk-sharing with partners.
The EBRD was swift to condemn the Russian invasion of Ukraine on 24 February and pledged to stand by Ukraine. In early April, the EBRD’s Board of Governors voted to suspend open endedly the access of Russian Federation and Belarus to EBRD finance and expertise, and the Bank has closed its offices in Russia and Belarus.
Canada is unequivocal in its support to Ukraine and has already imposed, and will continue further imposing, forceful economic and financial sanctions on Russia and Belarus. Canada has committed over $3.4 billion CAD in military, humanitarian, and other assistance to Ukraine so far this year, including $1.95 billion CAD in loans which have been fully disbursed, to help meet Ukraine’s urgent balance of payments needs and support its macroeconomic stability.
