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Ukraine will install a business ombudsman by years end to flag corruption as the nation struggles to emerge from a recession and lure investors, the European Bank for Reconstruction and Developments chief said.

The person will be selected by a mix of government and non-government party officials, the EBRD, international institutions and business associations, and will present annual reports to the parliament, EBRD President Suma Chakrabarti said yesterday in a phone interview from Kiev.

The appointee will be someone who will also transparently deal with complaints about corruption, interference, said Chakrabarti at the end of a one-day visit with Ukrainian President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk in the capital.

Ukraine is mired in its worst contraction since 2009 and a depth of corruption that surpasses Russia and is tied with Nigeria, according to Transparency Internationals corruption perception index. The former Soviet republic is rocked by a conflict against pro-Russian separatists that has killed more than 4,300 people and chased away investors. Foreign direct investments fell to $606 million in the third quarter, less than half the level of the same period a year before.

Ukraines dollar-denominated bonds due 2017 fell, pushing the yield up by 20 basis points to 18.32 percent as of 11:35 a.m. in Kiev, data compiled by Bloomberg show. The hryvnia, which lost 45.4 percent against the dollar since the beginning of the year, was unchanged at 15.1 to the U.S currency.

The EBRD will spend 1.5 million euros ($1.87 million) a year on the ombudsman position, according to a statement on Poroshenkos website.

The countrys economic recovery should be anchored by investments by 2016, the World Bank said last month.

The EBRD board will decide on providing a loan to Ukraine on Dec. 10 to upgrade its natural-gas transportation system, Chakrabarti said. The London-based lender will provide 200 million euros and the European Investment Bank will provide another 200 million euros, he said.

If that goes through, then I am hopeful we will also arrange what is called an import trade facility in the first quarter of next year for gas supplies, working with west European traders, the World Bank, and ourselves together in trying to arrange a revolving supply contract, he said. That will make sure there arent any shortages in the future.

The EBRD plans to invest about 1 billion euros in Ukraine this year and at least 1 billion euros in 2015, Chakrabarti said. The lender invested between 500 million euros and 600 million euros before corruption was an obstacle, he said.

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Ukraine to Pick Business Ombudsman by Year-End, EBRD Says