EU Balks On Gas Transit Loan For Kiev

KIEV, Ukraine -- The European Union decided to postpone a loan to Kiev meant to finance upgrades to the country's natural gas transport system, an official said.

Ukraine's state energy company Naftogaz was anticipating a $300 million loan from lenders including the World Bank, European Bank of Reconstruction and Development and the European Investment Bank.

Anton Usov, an official at the EBRD, was quoted by Russia's state-run news agency RIA Novosti as saying the loan was on hold.

"European Commission agencies are currently analyzing Ukraine's implementation of the law on reform of the natural gas market," he said.

"When the study is complete, depending on its results, we will be able to revisit the loan issue."

The European Commission is concerned that Naftogaz is holding a monopoly in the country.

The Russian report notes Ukrainian President Viktor Yanukovych had stated Naftogaz should be broken up into smaller companies while the National News Agency of Ukraine reports the president is opposed to a merger with Russian gas monopoly Gazprom.

Kiev wants a better gas price from Gazprom. Gazprom officials said the best way for that to happen would be through a merger with Naftogaz.

The Ukrainian report notes Naftogaz management has decided to finance reconstruction parts of the gas transit network independently.

Source: UPI