On Wednesday, the Board of Directors of the European Bank for Reconstruction and Development (EBRD) approved a loan of up to EUR80 million to Ukrnafta under state guarantees for the construction of about 100 MW of small gas-fired distributed power plants and cogeneration facilities. According to the bank’s website, the loan will help solve the problem of electricity shortages and ensure uninterrupted power supply to households and businesses.
The total cost of the project will be EUR103.8 million, and it will also be financed by a grant of up to EUR22 million expected to be provided by the Netherlands, the United States and other donors through the EBRD’s Special Crisis Response Fund, as well as a technical support grant of EUR1.8 million from other donors.
“Ukrnafta is Ukraine’s largest oil producer and operator of the national network of filling stations. In March 2024, the company took over the management of Glusco’s assets and operates 547 filling stations – 462 owned and 85 managed.
The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, the company has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
“Ukrnafta holds 92 special permits for commercial development of fields. It has 1832 oil and 154 gas production wells on its balance sheet.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share. In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense.
Ukrnafta, the second or third largest gas producer in Ukraine, has made a strategic decision to build gas generation and has already started to attract partners for this purpose, said Sergiy Koretsky, director of Ukrnafta, at the Ukraine Recovery Conference in Berlin (URC2024).
“At the first stage, it will be about 1 GW. For this year, we have a more optimistic and more realistic plan to build at least 100 MW,” he said during the URC2024 roundtable discussion on the issue of the fastest possible restoration of power generation in Ukraine.
Koretskyi said that Ukrnafta signed memorandums of understanding with Siemens Energy and Deutsche Bank on the sidelines of URC2024 to obtain expertise and develop new projects based on steam and gas turbines for combined heat and power generation, and to attract financing for the construction of gas-fired maneuvering generation.
At the same time, the Ukrnafta director noted that the company has more than enough liquidity on its accounts for the first stage and has a huge support from Ukrainian banks, while memorandums with Siemens and Deutsche Bank are aimed at the following parallel tracks for electricity generation from gas.
Koretsky recalled that Ukrnafta is also the largest oil producer in Ukraine, and after the government took over the company from Ihor Kolomoisky’s managers, the company generated $1 billion in EBITDA compared to net losses of $0.5 billion over the past 10 years.
The CEO added that an independent supervisory board was recently elected and Ukrnafta is now on the right track to implement its corporate, ESG and social responsibility strategies.
