China gives Naftogaz $1 billion ECA guarantee

(Kyiv Post, Kyiv, 2 April 2019) China has been eyeing strategic investments and acquisitions across Ukraine for at least a year now – but a Chinese state-owned credit firm, Sinosure, appeared to up the stakes on April 2 as it inked a deal to provide $1 billion in insurance coverage to Ukrainian energy conglomerate Naftogaz. Naftogaz has said that the new Chinese insurance is essentially a financial guarantee on the company being able to attract debt financing and further direct investment from China. Naftogaz is the state-owned Ukrainian oil and gas monopoly that handles the extraction, refinement and transportation of natural gas and oil. Data shows that China might replace Russia as Ukraine’s largest single-nation trading partner if growth rates in bilateral commerce between the two countries remain steady or increase. Ukraine’s Western and NATO allies, especially Japan, the United States and the United Kingdom have expressed strong concerns about China’s interest in Ukraine – they warn that investments are largely driven by Chinese self-interest and could pose a security threat to the alliance and Ukraine.