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Natural gas compressor station to be built in Ukraine with EBRD finance
Financing of US$ 52.0 million (EUR 51.6 million) from the European Bank for Reconstruction and Development (EBRD) will allow Gastransit, a closed joint-stock company in Ukraine, to build a gas compressor station in southern Ukraine. Costing a total of US$ 78.0 million (EUR 77.4 million), the new compressor will help to overcome the bottleneck in the gas transportation system in Ukraine. The project is the first phase of a programme that will further increase the delivery of Russian gas to Turkey and other south European countries.
The financing will comprise an A loan of US$ 31.1 million (EUR 30.8 million) for the EBRD’s own account and a B loan of US$ 20.9 million (EUR 20.7 million) for the account of participant banks. The newly created Black Sea Trade and Development Bank will provide co-financing under an A loan of US$ 12.0 million.
"This is the first time that pipeline-operating services in Ukraine will be provided on the basis of a cash-based commercial contract in line with international industry practice," said Ananda Covindassamy, Director for the EBRD’s Power and Energy Team. "In addition, this structure could be used to attract more foreign direct investment and debt finance for the expansion of the Balkan region’s gas transit capacity and will ultimately strengthen Ukraine’s energy sector."
This construction will allow the transportation of an additional maximum quantity of 3.8 bcma of Russian gas to Turkey via an existing pipeline through Moldova, Romania and Bulgaria. This will take place under an existing gas export contract and will further enhance regional cooperation in the energy sector. The transaction is also the first private financing in Ukraine’s gas sector to be undertaken without a guarantee from the Ukrainian Government.
Gastransit, a Russian, Ukrainian and Turkish joint venture, was established as a vehicle to build, own and operate additional gas transit capacity in Ukraine, in particular to supply the markets of south-eastern Europe and Turkey with Russian natural gas. Gastransit is a joint-stock, limited liability, majority foreign-owned commercial company, which is responsible for implementing the project.
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