Kiev asks Moscow for $5 bln loan to pay for gas

KIEV, March 11  – Ukraine has asked Russia for a $5 billion loan to pay for natural gas deliveries, Ukraine’s acting finance minister said on Wednesday.

“This loan will be used to buy gas,” Ihor Umanskiy said.

He added that Ukraine was looking at options to borrow from other sources, including the World Bank. 

The Russian finance minister said on Tuesday that Ukrainian Prime Minister Yulia Tymoshenko had officially asked Russia for a $5 billion loan.

“We are holding consultations with Ukrainian Finance Ministry officials,” said Alexei Kudrin, who is also a deputy prime minister. “No decision has been made yet.

The acting head of Ukraine’s National Bank said in late February the country could ask the International Monetary Fund to release the second installment of a $16.43 billion loan.

The second tranche of around $2 billion has been delayed over the inability of Ukraine’s government to prove to the IMF the country is capable of reducing its budget deficit.

Ukraine received $4.5 billion first installment of the IMF loan in November 2008.