Kyiv to cover debt incurred by the companies of Ukrainian oligarch Akhmetov

The National Commission for State Regulation for Energy and Public Utilities (NKREKP) will meet on January 9 to decide on the allocation of 2 billion UAH or $70.8 million among the power generating companies of thermal power plants (TPPs), the NKREKP website reports.

A quarter of the amount will be given to Centrenergo PJSC (294 million UAH or $10.42 million USD) and Donbasenergo PJSC (225.79 million UAH or $7.99 million USD).

The lion’s share of the money, 1.48 billion UAH ($52.39 million USD), will be given to Ukrainian oligarch Rinat Akhmetov's companies. 374.91 million UAH ($13.27 million USD) will go to DTEK Dniproenergo PJSC. 744.63 million UAH ($26.36 million USD) will go to DTEK Zakhidenergo PJSC. And finally, Nashi Groshi (“Our Money”) website reports that DTEK Skhidenergo LLC will receive 360.26 million UAH ($12.75 million USD).

The funds will cover the arrears accumulated by TPPs before September 1, 2017. The funds will be used to pay for the coal supply under the existing contrats. The state-owned corporation Energorynok already got a 2 billion UAH ($70.8 million USD) loan from Oschadbank in November to implement this decision.

Pursuant to this plan, the NKREKP must adopt “the algorithm of transferring funds from the current account with a special mode of use of the electric energy wholesale supplier" and “amendments to the budget/estimates of State Enterprise Energorynok for 2018."

Such amendments are necessary to bypass the law "On Electricity" that would otherwise define the method of allocation of Energorynok's funds to repay debts to electricity producers.

In simplest terms, all of Energorynok’s money for debt repayment should be distributed among the producers in the following proportion: approximately 50% of the money goes to TPPs, 40% to Energoatom, and the remaining 10% divided between Ukrhydroenergo, Ukrenergo, combined heat and power plants (CHPPs), and producers of "green" electricity. But first, old debts to the producers of electricity are to be closed.

However, the current planned scheme assumes that all the money will be given to the thermal power sector, which means that Energoatom and the rest will receive nothing to repay debts.

In the justification of the decision, NKREKP stated that it was adopted pursuant to the order of the Cabinet of Ministers dated 18 October 2017. This is Order Number 776-p "On measures to stabilize the operations of energy generating companies of thermal power plants."

To implement this decision, the Government held a meeting chaired by Volodymyr Groysman on October 25. On November 3, the Ministry of Energy and Coal Mining headed by Ihor Nasalyk appealed to the NKREKP to establish the algorithm, and Vice Prime Minister Volodymyr Kistion gave NKREKP a corresponding assignment on November 28.

  Akhmetov, Ukraine

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