The European Bank for Reconstruction and Development (EBRD) has agreed to offer up to €300m in financing to Ukrainian gas company Naftogaz (NAK) to increase the country’s security.

The loan will be used by the company to import natural gas to compensate for the loss of gas production in the country, following Russia’s invasion of Ukraine.

Naftogaz is considering expanding this loan facility to import additional gas volumes to meet the next heating season.

EBRD banking vice-president Alain Pilloux said: “The urgency to act is clear. Gas is needed for the next heating season, for electricity production, and more broadly for supporting the economy. The replenishing of gas stocks must start now to avoid serious consequences in the autumn.

“This operation is very simply about providing heating to the people and economy of Ukraine.”

Naftogaz will source natural gas from its existing pre-qualified, EU-based gas traders, using a competitive procurement mechanism.

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The firm is mandated by EBRD to use contracts based on the European Federation of Energy Traders standards.

Naftogaz CEO Yuriy Vitrenko said: “This will definitely contribute to Ukraine’s resilience. We are also grateful that, together with the EBRD, we can help modernise Ukraine by implementing best practices in both the purchase of gas and the sustainable development of the energy sector in Ukraine.”

The Ukrainian energy firm plans to use the initial tranche of €50m from EBRD for emergency gas purchases needed to prepare the country’s gas system for the next heating season.

Naftogaz has set a target to raise €1bn in total to purchase up to one billion cubic metres of gas to ensure that there is enough gas in Ukraine’s gas system by autumn.

In a separate announcement, Naftogaz has signed an agreement to purchase liquefied natural gas (LNG) and green liquid hydrogen (LH2) from Canadian energy developer Symbio Infrastructure.

Naftogaz intends to receive the LNG and LH2 from Quebec, Canada, at an import terminal in a mutually agreed European transit country.