Ukraine Gets $308 Million Pledge For Gas System

KIEV, Ukraine -- Two European investment banks have pledged to lend Ukraine $308 million to upgrade its ailing natural gas transport and storage system.

The European Bank for Reconstruction and Development together with the European Investment Bank on Tuesday promised to fund the modernization project, if Ukraine pushes ahead with reforming its troubled gas sector.

The Ukrainian government must cut subsidies to households for heating and hot water and improve management at the state energy firm Naftogaz.

Naftogaz is also obliged to contribute some $200 million (euro 141 million) for the project.

Ukraine's natural gas transit system is crucial to European countries, which receive much of their gas imports from Russia via pipelines that cross Ukraine.

Source: AP