Sayenko Kharenko acted as Ukrainian legal counsel to Citibank, N.A., London Branch, and Deutsche Bank AG, London Branch, as mandated lead arrangers and original lenders under EUR 478,285,000 facility to PJSC “National Joint-Stock Company “Naftogaz of Ukraine” (Naftogaz). The financing is guaranteed by the International Bank for Reconstruction and Development (IBRD) and has the benefit of a sovereign guarantee in the form of indemnity provided by Ukraine to the IBRD.
The facility was made in the form of a letter-of-credit and direct-disbursement financing and is available for utilisation by Naftogaz during two years. The deal structure is aimed at improving the commercial terms of Naftogaz’s gas-purchase contracts through offering the suppliers letters of credit issued by major international banks. The IBRD’s guarantee backed by an indemnity from Ukraine helped Naftogaz to secure cost-effective financing for this purpose.
The deal was made within the framework of the World Bank’s Gas Supply Security Facility Project for Ukraine and is “part of the World Bank Group’s support to wider reforms in the energy and gas sector to help Ukraine create an energy system that can deliver reliable and affordable energy services to families and industries”, according to the World Bank.
Sayenko Kharenko’s partner Nazar Chernyavsky commented: “For us, it is a great privilege to be a part of the team assisting Citibank and Deutsche Bank, who, together with the World Bank, Ministry of Finance and Naftogaz itself, successfully implemented this innovative financing. The deal became unique for the Ukrainian market, both in terms of its strategic importance for the country and commercial and legal complexity. Successful launch of the project required a lot of focus and cooperation among the wide circle of the parties involved, as well as much effort on the part of their legal advisors.”
Allen & Overy acted as English-law counsel to Citibank, N.A., London Branch, and Deutsche Bank AG, London Branch.
Sayenko Kharenko’s team advising on the transaction included counsel Anton Korobeynikov, senior associate Maria Tsabal, associates Marta Lozenko, Taras Shyb, Dmytro Vasylyna and Mykhailo Grynyshyn, and was led by partner Nazar Chernyavsky.