Naftogaz CEO reports on targeted use of $500 mln loan

Andriy Kobolev, CEO of Ukraine`s state-owned oil and gas company Naftogaz of Ukraine, has informed that the company will use a $500 million loan it has received from Citybank and Deutsche Bank under the World Bank`s guarantee to cover cash deficiency during the heating season.

”Actually it will be used primarily to cover cash shortages of Naftogaz resulting, for example, from the decision that we will receive payments from the Ukrainian consumers for heat and gas respectively in equal parts,” Kobolev told Ukrainian TV Channel 5.

He explained that cash shortages occur due to the fact that payments for heat supplies in Ukraine will be made by consumers throughout the year, not just during the cold season. Kobolev also pointed to low borrowing costs. The loan was disbursed at an interest rate of 3% per annum.

As was earlier reported, the World Bank`s Board of Directors approved a decision to give Ukraine loan guarantees of $500 million for purchases of necessary volumes of natural gas for the 2016-2017 heating season. The funds were transferred to Naftogaz of Ukraine.

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