On 1 April, Naftogaz and China Export and Credit Insurance Corporation (Sinosure) concluded a memorandum of understanding regarding a $1 billion insurance quota for Naftogaz group. This will enable loans and foreign direct investments from China within the said amount.
This insurance coverage from Sinosure does not require sovereign guarantee, which means that Naftogaz will not rely on Ukraine’s state budget while enabling the group to attract USD 1 billion in investment into the oil and gas industry.
During the first stage, the insurance coverage provided by Sinosure will be used to borrow about USD 160 million to fund UGV’s current contracts with Chinese corporations supplying drilling equipment and turnkey drilling services.
At the second stage, another USD 800 million is planned for additional Naftogaz group projects that will be agreed upon with China in the near future.
This memorandum continues the cooperation of Naftogaz group with Sinosure. Thanks to Sinosure’s insurance coverage in 2018, UGV acquired 13 drilling rigs costing nearly USD 140 million with a five-year payment deferral. The rigs were bought from Honghua International, which is part of China Aerospace Science and Industry Corporation.
Sinosure Corporation is China’s state-owned export and credit corporation operating under the OECD model. Risks insured by the corporation totaled about USD 3.4 trillion as of the end of 2017 while its credit rating is equal to the sovereign rating of China.
It was said earlier that the Stockholm Arbitration appointed a hearing on the claim of the Ukrainian Naftogaz against the Russian Gazprom, in which the Ukrainian gas company demands to recover $11.6 billion trillion from Gazprom for April-May 2021.