Ukraine's Cabinet of Ministers has authorized Ukrainian Finance Minister Oleksandr Danyliuk to sign an agreement guaranteeing the repayment of a loan to buy gas between Ukraine and the International Bank for Reconstruction and Development (IBRD, part of the World Bank).

The press service of the Finance Ministry reported that the government at a meeting on Wednesday approved a delegation to participate in the negotiations with the IBRD chaired by Deputy Finance Minister Yuriy Butsa.

"The decision to provide guarantees for $500 million to support purchase of natural gas by national joint-stock company 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 ministry said.

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.