OREANDA-NEWS. March 05, 2013. Ukraine's gas transportation system will be upgraded in the coming years. It was provided by the state Economic Development Program for 2013 - 2014 years, which was passed as a whole at the enlarged meeting of the Cabinet of Ministers of Ukraine with the participation of the President of Ukraine Viktor Yanukovych.

To address the issue with financing, on February 26, 2013, the meeting of the Minister of Energy and Coal Industry Eduard Stavysky with the World Bank Country Director for Ukraine, Belarus and Moldova Europe and Central Asia Qimiao Fan was held. During the meeting, Eduard Stavysky thanked the International Bank for Reconstruction and Development for the willingness to be one of the largest investors in the economy of Ukraine, particularly in the fuel and energy sector. With support from IBRD in power and hydropower successfully is realizing two investment projects totalling more than USD 600 million.

At the meeting it was stressed, that allocation of the funds of IBRD, the European Bank for Reconstruction and Development and the European Investment Bank for the project "Modernization and reconstruction of the Urengoy-Pomary-Uzhgorod pipeline" will be an important political signal of support by international financial institutions the need to reconstruct the GTS of Ukraine as an important element of energy security of Europe.

Ministry of Energy and Coal Industry of Ukraine is ready to continue to exert all efforts to carry out reforms in the oil and gas sector to the fulfillment of international obligations and opportunities to attract resources Trust Fund by the Ukraine's Government.

Recall that for over three years, a dialogue with the European Commission and international financial institutions (IFIs) in order to discharge a loan for the modernization of Ukraine's gas transit system is continuing. During this period, the Government of Ukraine has consistently fulfilled obligations due to the signed a joint statement the EU - Ukraine on March 23, 2009 and the Treaty on the establishing of the Energy Community, which Ukraine joined in 2010. For effective preparation of the project of modernization and reconstruction of gas transportation system of Ukraine and attraction of the loans of MFIs, Naftogaz of Ukraine attracted services of consortium of Western consultants led by Mott MacDonald Ltd for making feasibility study of modernization of the transit system and underground gas storage facilities of Ukraine (FS) which is a necessary document for adoption by MFIs decision to grant credit.

The results of the feasibility study showed that the modernization of Ukraine's gas transit system is effective and meets both the standards of Ukrainian legislation and EU standards.

Priority projects for funding selected first line of the Modernization and reconstruction of the main Urengoy-Pomary-Uzhgorod project, which value according to preliminary estimates will be 519 million dollars, including by EBRD and EIB funds on a parity basis - 308 million dollars, others - at own expense of the Naftogaz of Ukraine.

Other lines of financing of the Modernization and reconstruction of the main Urengoy-Pomary-Uzhgorod project (total cost 1024 million U.S.D.) will be also carried out including IBRD loan funds.