The Finance Ministry, the International Finance Corporation (IFC) and Ukrgasbank have started assessing and structuring the financial took allowing IFC to enter the capital of this state-owned bank, the Finance Ministry reported.
“This is the most important stage in the implementation of the fundamentals of the strategic reform of the public banking sector… IFC’s entry into Ukrgasbank’s capital will be a powerful signal for international investors and will contribute to the further development of the banking system in general,” Finance Minister Oksana Markarova said.
The Finance Ministry said that the transition to this stage became possible as a result of the successful fulfillment of the terms of the tripartite memorandum of understanding signed in November 2017 to support the privatization (sale) of the bank by the ministry and Ukrgasbank.
According to the memorandum, IFC helped Ukrgasbank to strengthen corporate governance, ensure its operational independence, and further improve its stable banking model based on commercial viability.
Successful cooperation between the state-owned bank and IFC has already allowed for more than 145 projects in the field of clean energy using biofuels, hydropower, solar and wind energy with a total capacity of 866 MW, which is a quarter of all renewable energy facilities in Ukraine. Thanks to these projects, CO2 emission reduction has reached more than 1 million tonnes annually.
As reported, in November 2017, Ukraine’s Ministry of Finance agreed on cooperation with IFC in the process of privatization of Ukrgasbank. The memorandum of cooperation also envisaged a possibility of entering the capital of the bank by IFC to support its sale. The investment will depend on several factors, including the outcome of the due diligence of the bank.
Ukrgasbank was established in 1993 and the state represented by the Ministry of Finance owns 94.9% of its shares. Since 2015, the bank has been included in the list of state-owned facilities of strategic importance for the economy and national security.
