Chinese state-owned credit firm Sinosure has signed a deal to provide Naftogaz, Ukraine’s state energy firm, with an insurance coverage of one billion US dollars, enabling debt financing and foreign investments.
In the first stage, Naftogaz will borrow about 160 million US dollars to fund current contracts with Chinese companies, while an additional 800 million dollars will be provided for Naftogaz projects “in the near future”.
“This insurance coverage from Sinosure does not require a sovereign guarantee, which means that Naftogaz will not rely on Ukraine’s state budget in order to attract one billion US dollars in investment into the oil and gas industry,” Naftogaz said in a statement.
In 2018, insurance coverage provided by the Chinese credit firm allowed UGV, a member of the Naftogaz group, to purchase drilling rigs from China costing 140 million US dollars.
According to recent data, bilateral trade between Ukraine and China increased by 20 per cent in 2018. Some economists believe that China may replace Russia as Ukraine’s major trading partner if the volume of current investments continue.
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