15:25 Sep. 19, 2016
Creditors warn government's decision to impose control over company could jeopardise financing
Financial Times reports on the situation around gas companies in Ukraine. World Bank and European Bank for Reconstruction and Development are worried by recent development in Ukraine. A surprise decision of Ukrainian government to impose direct control over Ukrtransgaz company could jeopardise financing linked to linked to a .5bn International Monetary Fund bailout package.
On September 7th, the Ministry of Economic Development and Trade took procurements of Ukrtransgas out of Naftogaz Ukrainy control. It also planned to take Ukrtransgaz itself out of Naftogaz control, so it would be subordinated to the Ministry. This move was sharply criticised by Naftogaz. It said the decision would put at risk signing the agreement between Naftogaz and World Bank on giving a loan of USD 500 million. Moreover, the decision violates the credit agreement with European Bank for Reconstruction and Development.
Ministry's move already concerned the EBRD. Nevertheless, the decision was soon suspended. On Monday, September 19th, Stepan Kubiv, the minister of economics, announced the suspension and promised to conduct more consultations on the matter. He stressed that the Ministry will create an independent management in Naftogas and other companies, connected to gas exploration and transport.