EU, Ukraine to agree $2.5 billion loan for gas pipeline

The European Union plans to seal today a $2.5 billion loan for Ukraine to modernize its natural gas pipeline network if the system is made more open and transparent.

The decision to give the loan to national oil and gas company Naftogaz could be made at a meeting in Brussels later on Monday, Kommersant reports.

An unidentified European Commission official was quoted as saying that the talks with Ukraine had been difficult, with the Commission insisting on reform of Naftogaz as a condition for the loan.

Kiev agreed to make Ukrtransgaz, an affiliate that runs the country's pipelines, an independent company and give access to the pipelines and underground gas storages to other companies on transparent commercial conditions, Rosbalt.ru says.

The seven-year loan - to be issued by the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank - would go to modernize pipelines, compressor stations and underground storage facilities, the paper said. It added that the statement to be released after the meeting will welcome other investors to participate.