Ukraine May Get IMF Loan For Russian Gas Within Days

BRUSSELS, Belgium -- Ukraine’s ambassador to the European Union said today the nation may get a $4 billion loan led by the International Monetary Fund within days to pay for Russian gas.

NAK Naftogaz Ukrainy, Ukraine’s state-owned energy company, said last week it is counting on EU help in receiving credit from international financial institutions for natural-gas payments to Russia’s OAO Gazprom. Ukraine got a $16.4 billion emergency loan from the IMF last year to support its financial system amid the global economic crisis.

A dispute between Russia and Ukraine in January left more than 20 countries without gas for almost two weeks. Russian Prime Minister Vladimir Putin said this month Ukraine needs about $5 billion for pumping gas into storage this year and warned that a cut-off could be repeated unless the country pays for delivered supplies.

“We think that an additional amount of money may be given to Ukraine by the IMF in order to bridge this lack of payments for a short period, and we hope that it will end the problem,” Andri Veselovsky, head of the Ukrainian mission to the EU, said in an interview today in Brussels. “It’s a matter of days, not months.”

IMF officials couldn’t immediately be reached for comment. Ukraine says an IMF delegation is in Kiev for the second review of the original loan.


The European Union signaled last week it was concerned about the future supply of Russian gas through Ukraine. European Commission President Jose Barroso said the 27-member state bloc “must not sleepwalk into another gas crisis.”

Veselovsky said the problem needs to be addressed. “Yes, we would like to solve it. Yes, we addressed the IMF and other financial institutions and some banks.”

Kiev-based Naftogaz got a 3.8 billion hryvnia ($500 million) loan from state-run lender VAT Oshchadbank earlier this month to ensure payment to Gazprom for fuel delivered in May. Naftogaz has a 2009 financial deficit of 27 billion hryvnias, Ukraine’s President Viktor Yushchenko said June 11.

The east European state will buy natural gas valued at $250 million from Gazprom in June and quadruple the amount next month, Prime Minister Yulia Timoshenko said in a statement on the government’s Web site last week.

There should be “no doubt” Ukraine will pay for supplies of Russian gas in June and the following months, Veselovsky said today. Under an agreement with Russia, Ukraine must pay for gas within the first seven days of each month.

Contracting Economy

Ukraine’s economy contracted 8 percent in the fourth quarter of 2008, compared with 6.4 percent growth in the previous quarter as the global financial crisis curbed demand for the country’s exports.

“Ukraine coped with the current economic and financial crisis, and its economy was very severely hurt by the crisis, more than neighboring countries, so this shortage of money is specific for Ukraine and it needs specific assistance,” Veselovsky said. ‘

Source: Bloomberg