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Business representatives are concerned about the NEURC’s decision regarding the debt repayment

26/ 01/ 2021
  Last week, the National Energy and Utilities Regulatory Commission held a meeting where it decided on “the guideline for the Guaranteed Buyer to allocate at least 50% of funds received from NPC Ukrenergo to repay debts to NNEGC Energoatom”. It should be noted that such a decision contains serious violations of the law. First of all, the adopted NEURC’s decisions should be formalized by resolutions, except for decisions to remedy violations identified during the control, which should be formalized by orders. Secondly, there is an established algorithm to ensure the payment of debts to RES producers. According to the Memorandum of Understanding and the Law of Ukraine On Amendments to the State Budget of Ukraine for 2020, state guarantees in 2020 may be provided to ensure the fulfillment of debt obligations of a company operating in the field of electricity transmission in Ukraine and which authorized share capital belong 100% to the state. On December 9, 2020, the Cabinet of Ministers adopted Resolution № 1203 on Some issues of implementation of the Law of Ukraine On the State Budget of Ukraine for 2020, according to which in 2020 state guarantees were provided to ensure the fulfillment of debt obligations on loans attracted by the private joint-stock company National Energy Company Ukrenergo from public sector banks in order to repay debts to the state enterprise Guaranteed Buyer. Thus, the funds raised by NPC Ukrenergo from public sector banks under state guarantees are exclusively targeted at the repayment of existing debts to RES producers. Besides, the NEURC has not yet published the full text of its guideline which is a cause for concern. Additionally, no legal act establishes the authority of the Regulator to determine or recommend, or in any other way influence the procedure for distribution of funds from the current account of the Guaranteed Buyer. Therefore, the European Business Association draws the attention of the President of Ukraine Volodymyr Zelensky to the adoption and implementation of the above decision, which violates the agreements agreed at the level of the Energy Community Secretariat with the Government of Ukraine and implemented in the Law. According to the member companies of the EBA Energy Committee, such a decision carries significant risks not only for the energy sector but also for Ukraine as a whole, namely: · Loss of reputation as an investment-attractive country which will cost Ukraine 6.1 billion euros; · Failure to comply with international obligations regarding the implementation of environmental policy by reducing the level of greenhouse gases by 9.2 million tons annually; · Ignoring the positions of the European Energy Community, the European Bank for Reconstruction and Development, which will stop international partners from providing Ukraine financial support in other sectors of the economy. Business urges the regulator not to make decisions that violate international agreements and stop the development of RES in Ukraine. At the same time, we appeal to the President of Ukraine to help resolve the situation.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.    

Last week, the National Energy and Utilities Regulatory Commission held a meeting where it decided on “the guideline for the Guaranteed Buyer to allocate at least 50% of funds received from NPC Ukrenergo to repay debts to NNEGC Energoatom”.

It should be noted that such a decision contains serious violations of the law. First of all, the adopted NEURC’s decisions should be formalized by resolutions, except for decisions to remedy violations identified during the control, which should be formalized by orders. Secondly, there is an established algorithm to ensure the payment of debts to RES producers. According to the Memorandum of Understanding and the Law of Ukraine On Amendments to the State Budget of Ukraine for 2020, state guarantees in 2020 may be provided to ensure the fulfillment of debt obligations of a company operating in the field of electricity transmission in Ukraine and which authorized share capital belong 100% to the state.

On December 9, 2020, the Cabinet of Ministers adopted Resolution № 1203 on Some issues of implementation of the Law of Ukraine” On the State Budget of Ukraine for 2020″, according to which in 2020 state guarantees were provided to ensure the fulfillment of debt obligations on loans attracted by the private joint-stock company National Energy Company Ukrenergo from public sector banks in order to repay debts to the state enterprise Guaranteed Buyer.

Thus, the funds raised by NPC Ukrenergo from public sector banks under state guarantees are exclusively targeted at the repayment of existing debts to RES producers. Besides, the NEURC has not yet published the full text of its ” guideline” which is a cause for concern. Additionally, no legal act establishes the authority of the Regulator to determine or recommend, or in any other way influence the procedure for distribution of funds from the current account of the Guaranteed Buyer.

Therefore, the European Business Association draws the attention of the President of Ukraine Volodymyr Zelensky to the adoption and implementation of the above decision, which violates the agreements agreed at the level of the Energy Community Secretariat with the Government of Ukraine and implemented in the Law. According to the member companies of the EBA Energy Committee, such a decision carries significant risks not only for the energy sector but also for Ukraine as a whole, namely:

· Loss of reputation as an investment-attractive country which will cost Ukraine 6.1 billion euros;

· Failure to comply with international obligations regarding the implementation of environmental policy by reducing the level of greenhouse gases by 9.2 million tons annually;

· Ignoring the positions of the European Energy Community, the European Bank for Reconstruction and Development, which will stop international partners from providing Ukraine financial support in other sectors of the economy.

Business urges the regulator not to make decisions that violate international agreements and stop the development of RES in Ukraine. At the same time, we appeal to the President of Ukraine to help resolve the situation.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

   

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