Business urges to prevent the violation of RES investors’ rights

05/ 01/ 2021

Six months ago, the Law of Ukraine on Improving the Conditions for Promoting Electricity Generation from Renewable Energy came into force, which was based on the provisions of the Memorandum of Understanding on the settlement of problematic issues in the field of renewable energy in Ukraine. At the same time, despite all RES producers satisfied the conditions for reducing green tariffs, most of the Governments obligations remain unfulfilled in terms of ensuring full current payments guaranteed by the buyer to renewable energy producers and ensuring repayment of the Guaranteed Buyers debt to RES producers. Thus, as of August 1, 2020, the accumulated amount of debt is UAH 22.4 billion (40% of this amount had to be repaid by the end of 2020, the remaining 60% is to be repaid quarterly during 2021). On December 31, 2020, the NEURC unexpectedly tried to approve some regulations (related to credit agreements concluded between the transmission system operator and state-owned banks) with a reservation that explicitly prohibits the Guaranteed Buyer from using the proceeds to pay renewable electricity producers. The business notes that if the NEURC approves this or similar regulations, such as blocking the quick repayment of 40% of the accumulated debt by the Guaranteed Buyer to renewable energy producers, during the next scheduled hearing on January 6, 2021, or any other date, it will lead to failure the agreements reached by the state between the government and RES investors, reached in 2020. Moreover, such a decision of the Regulator in combination with the lack of action of the Government on the implementation of the above Law of Ukraine № 810-IX will be a clear sign that Ukraine does not want to fulfill its obligations to investors, which will have irreparable consequences for the countrys investment climate. Therefore, EBA calls on the Government to fulfill the obligations set out in the Memorandum of Understanding and to prevent violations of the rights of investors in renewable energy by the NEURCs decisions that contradict previously reached agreements.

At the same time, despite all RES producers satisfied the conditions for reducing “green” tariffs, most of the Government’s obligations remain unfulfilled in terms of ensuring full current payments guaranteed by the buyer to renewable energy producers and ensuring repayment of the Guaranteed Buyer’s debt to RES producers. Thus, as of August 1, 2020, the accumulated amount of debt is UAH 22.4 billion (40% of this amount had to be repaid by the end of 2020, the remaining 60% is to be repaid quarterly during 2021).

On December 31, 2020, the NEURC unexpectedly tried to approve some regulations (related to credit agreements concluded between the transmission system operator and state-owned banks) with a reservation that explicitly prohibits the Guaranteed Buyer from using the proceeds to pay renewable electricity producers.

The business notes that if the NEURC approves this or similar regulations, such as blocking the quick repayment of 40% of the accumulated debt by the Guaranteed Buyer to renewable energy producers, during the next scheduled hearing on January 6, 2021, or any other date, it will lead to failure the agreements reached by the state between the government and RES investors, reached in 2020.

Moreover, such a decision of the Regulator in combination with the lack of action of the Government on the implementation of the above Law of Ukraine № 810-IX will be a clear sign that Ukraine does not want to fulfill its obligations to investors, which will have irreparable consequences for the country’s investment climate.

Therefore, EBA calls on the Government to fulfill the obligations set out in the Memorandum of Understanding and to prevent violations of the rights of investors in renewable energy by the NEURC’s decisions that contradict previously reached agreements.