International financial institutions and the European Union have reached a deal to restructure and modernise Ukraine’s Gas sector.
In return, financial loans will be set up to enable the former soviet republic to pay for the gas imports it receives from Russia. The idea is to prevent future breaks in supply to Western Europe. Mark Gray, European Commission Spokesperson said: “Of course, we can not give absolute guarantees in terms of future crisis but what we can say is that through the work of the European Commission, through the work of the International Financial Institutions, we significantly reduced the possibility of future crisis.” Over two years, funds from institutions including the World Bank and Europe’s Reconstruction and Development Bank will be pumped into the sector – amounting to around €1.2bn – some of which will enable Ukraine’s gas firm NAFTOGAZ to pay off its debts. Ukraine is a key transit country for gas and oil supplies from Russia to the EU. It carries up to 20% of the bloc’s consumption. Last winter, supplies were interrupted over a price and payment dispute between Kiev and Moscow, leaving some European countries without heating in freezing weather.