* Trade financing could pay for gas imports
* Any loans have to be coupled with reform pledges
* Loss of South Stream increases Ukraine's potential
By Barbara Lewis
BRUSSELS, Dec 15 Kiev secured 300 million euros
($374 million) in development loans to repair the leaking
pipeline that is the main gas route from Russia to the EU, under
a deal on Monday that the lenders said was a step towards making
Ukraine a gas-trading hub.
European Bank for Reconstruction and Development (EBRD)
officials, in Brussels to hand over to Ukraine 150 million euros
on top of 150 million already promised by the European
Investment Bank, also said the bank was considering financing
That could help Ukraine to pay for gas imports - potentially
avoiding the kind of crisis that this year caused a six-month
cut-off of Russian gas to Kiev - but any deal would have to be
agreed by the EBRD board and be coupled with commitments of
The deal marks the first time the EBRD has invested in
Ukraine's creaking pipelines and follows five years of
Riccardo Puliti, EBRD managing director for energy, said
that because of concerns about corruption, previous energy loans
had only been for grids, but the bank was now confident Kiev was
serious about reforms.
"We would not have done this unless we had a very clear
commitment from the authorities at the highest level," Puliti
The new money covers a four-year upgrade of a crucial
section of the Urengoy-Pomary-Uzhgorod pipeline, including a
link that allows gas to be pumped east as well as west across
the Slovak border.
One of the aims is to inspire more investment and offset the
collapse in confidence following Moscow's seizure of the Crimea
region in March.
Puliti said Ukraine, home to Europe's most extensive gas
storage, still had major potential and could provide the basis
of a European spot trading market, especially now Russia's
Gazprom has abandoned South Stream, which could have
wiped out Ukraine's relevance as a transit state.
The reforms the EBRD demands include that Ukraine respects
EU law known as the Third Energy Package, which mandates that
companies that own gas supplies cannot dominate ownership of the
pipelines used to ship them.
The law was the biggest regulatory obstacle to South Stream,
which would have piped Russian gas directly to the EU, bypassing
($1 = 0.8030 euros)
(Additional reporting by Pavel Polityuk in Kiev, editing by