Ukraine's Cabinet of Ministers at a meeting on Wednesday has provided guarantees to the International Bank for Reconstruction and Development (EBRD), part of the World Bank group, for raising $500 million by national joint-stock company Naftogaz Ukrainy to buy natural gas.

"The adoption of the project would help to expand the stabilization energy fund and provide [Naftogaz] with funds for autumn and winter period of 2016/17," First Deputy Prime Minister Stepan Kubiv said.

As reported, the decision to provide guarantees for $500 million to support purchase of natural gas by Naftogaz Ukrainy was approved by the IBRD Board of Directors on October 18, 2016. The funds will be raised under a loan agreement to be signed by Naftogaz Ukrainy and Citibank and Deutsche Bank

The attraction of the IBRD secured loan would help Ukraine to buy enough gas for passing the 2016/17 heating season.

The IBRD guarantee is provided on the following conditions: the guaranteed sum is up to $500 million, the guarantee fee is 0.5% per annum (paid each six months as advance payment)l; the reservation fee is 0.25% per annum; single fee – 0.25%; the entrance fee – 0.15%, and the execution fee – 0.10%.

All fees are paid by Naftogaz Ukrainy.