The European Bank for Reconstruction and Development said Monday it will lend Russian oil giant OAO Lukoil (LKOH.RS) up to $300 million to fund the modernization of a power subsidiary in southern Russia.
In a statement, the development bank said the transaction will consist of an initial $150 million loan, to be followed within 24 months of the signing the facility with an option for the company to raise the sum by a further $150 million.
Proceeds from the loan will be used for modernizing the TGK-8 thermal power generator in Krasnodar, southern Russia. Lukoil owns a controlling stake in TGK-8, and became its strategic investor in 2008 as part of the restructuring of Russia's electric power system.
The EBRD, which was inaugurated in May 1991, facilitates investment to help develop market economies and democracies from central Europe to central Asia.