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    Russia Extends Loan Repayment Deadline for Ukraine

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    Ukrainian state energy company Naftogaz Ukrainy said Tuesday that it had negotiated a new deadline for its repayment of a $2 billion loan to neighboring Russia’s state-controlled Gazprombank.

    KIEV, October 1 (RIA Novosti) – Ukrainian state energy company Naftogaz Ukrainy said Tuesday that it had negotiated a new deadline for its repayment of a $2 billion loan to neighboring Russia’s state-controlled Gazprombank.

    The new agreement with Gazprombank “already has legal force,” Ukrainian Deputy Energy Minister Andrei Bondarenko told journalists.

    Kiev and Moscow have a long history of disputes over natural gas deliveries, in particular over pricing. While Ukraine is set to sign a series of landmark trade agreements with the European Union in November, the Kremlin is pushing for the former Soviet state to commit to a Moscow-led Customs Union with Russia, Kazakhstan and Belarus.

    The loan was issued by Gazprombank in 2012 at an 8.5 percent annual interest rate, and was due to be repaid by June 24 this year. Gazprombank is 35.5 percent owned by Russian state-owned gas giant Gazprom.

    Last month the Ukrainian parliament passed in a first reading a bill that would allow the state to guarantee Naftogaz Ukrainy’s repayment, paving the way for the extension.

    In one of the most recent energy disputes between Kiev and Moscow, Gazprom presented Naftogaz Ukrainy with a $7 billion bill in January, saying the country should pay for gas it did not use in 2012. Gazprom supplies natural gas to Ukraine under rigid “take or pay” contracts that cannot be adjusted to fluctuations in demand.

     

    Tags:
    Ukrainian Energy Ministry, Gazprombank, Gazprom, Naftogaz, Andrei Bondarenko
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