The Board of Directors of the World Bank is to consider the provision of $500 million guarantees for national joint-stock company Naftogaz Ukrainy to raise letters of credit or loans from international commercial banks to buy natural gas from individual suppliers, the bank has said on its website.

This project was proposed in autumn 2015. Its discussion was several times postponed.

The guarantees could be accompanied by the provision of trade financing of up to $200 million by the International Finance Corporation (IFC) from the World Bank Group to buy gas by Naftogaz from a large European supplier ENGIE (earlier GDF SUEZ) under a framework contract signed by the companies. The IFC Board approved the provision of the funds on December 17, 2015.

As reported, European Investment Bank (EIB) President Werner Hoyer and World Bank Group President Jim Yong Kim signed an agreement under an EU guarantee that aims to facilitate the purchase of gas by Ukraine’s national gas company Naftogaz on October 9, 2015 in Lima (Peru). The EIB will guarantee up to $520 million of selected World Bank loans in Ukraine, which will enable the World Bank to guarantee letters of credit facilities for gas purchases by Naftogaz.