OREANDA-NEWS. December 24, 2007. EBRD and IFC has signed the $200 mln loan agreement with OJSC "Concern Galnaftogaz". This project is a part of financing programme between EBRD, IFC and OJSC "Concern Galnaftogaz" for the amount of $200 mln, which is supposed to be pro rata allocated.

"The loan will also increase competition in Ukraine's refining industry, currently dominated by Russian-owned refineries with tied oil products retail networks, by supporting a strong local market player with a diversified supply base," stated the EBRD press-release.

The loan is allocated as follows:

- $40 mln. C loan – subordinated debt ($20 mln. provided by both, EBRD and IFC);
- $60 mln. A loan – direct or senior loan ($30 mln. provided by both, EBRD and IFC);
- $100 mln. B loan – syndicated loan, which was raised by leading international banks ($50 mln. provided by both, Erste Bank and ING Ukraine).

Under the Galnaftogaz' investment programme, the current financing will help bring the total number of "OKKO"-branded filling stations to over four hundred by 2010, almost doubling the "OKKO"-branded network from its position today.

According to Mr. Riccardo Puliti, the EBRD Business Group Director for energy and natural resources, the purpose of the transaction is to consolidate the successful development and growth of OJSC "Concern Galnaftogaz" as a high quality network of domestic fuel filling stations and secure their position as a national player in the future.

"IFC values its partnership with Galnaftogaz. The company has demonstrated strong commitment to transparency and to best environmental, health, and safety practices.  We look forward to continuing our cooperation, which supports improvements in the country's infrastructure and helps create permanent jobs for Ukrainians," said Mr. Lance Crist, Senior Manager in IFC's Oil, Gas, Mining, and Chemicals Department.

"This loan, obtained from two worldwide known international financial organizations shows a huge credit of trust to our company and to the fact, that Galnaftogaz will be able to be in full compliance with tight obligations taken under signed loan agreements. Apart from that, this financing is indirect evidence of trust to ukrainian economy," said Mr. Vitaliy Antonov, Head of the Supervisory Board of OJSC "Concern Galnaftogaz".

"EBRD's and IFC's long-term funding and assistance in developing our corporate governance and environmental standards has been instrumental in helping us get where we are today.  The new financing from EBRD's and IFC will help us reach the next level of growth, expand our activities throughout the country, and continue to deliver the highest-quality products and world-class service to our customers," said Mr. Yuri Kuchabskiy, General Director of Galnaftogaz.

European Bank of Reconstructing and Development is the biggest financial investor in Ukraine. As of the end November 2007, it had committed over ?3.12 billion through more than 156 projects.