Alternative Energy: Industry Update 2021

• Guaranteed Buyer repays debts for green energy generated in last four months of 2020

On February 4, the Guaranteed Buyer announced payment of UAH 310 million to renewable energy (RE) producers for electric power produced in December 2020, which marks full settlement for August 1 – December 31, 2020.

Earlier, on February 1, 2021, the Guaranteed Buyer reported 36% payment for green energy generated during January 2021.

By settling payments starting from August 1, 2020, the Government has kept its promise formalized in the Memorandum with renewables associations, namely to ensure 100% ongoing payments to renewables.

• Guaranteed Buyer uses bank credits to cover “old” debts to RE producers

On February 4, the Guaranteed Buyer announced payment of UAH 900 million to RE producers in order to repay 2020 debts under the feed-in tariff.

The Government is late with repayment of 2020 debts, even though fundraising by Ukrenergo was done time. In particular, Ukrenergo raised 10.25 billion from state-owned banks (UAH 5 billion from Oshchadbank, UAH 4 billion from Ukreximbank, and UAH 1.25 billion from Ukrgazbank). These funds have not been forwarded to the Guaranteed Buyer due to a dispute about the share of repayments of 2020 debts to nuclear producers.

Meanwhile, the Ministry of Finance announced plans to issue a green bond in order to repay around UAH 20 billion of 2020 debt in the course of 2021.

• Ukrenergo applies for transmission tariff increase

Ukrenergo has applied to NEURC (Ukraine’s National Energy and Utilities Regulatory Commission) for an increase in the transmission tariff starting from April 1, 2021. The tariff shall be increased from UAH 294 to UAH 415 per MWh. Once adopted, the transmission tariff will be enough to cover 100% of ongoing payments to renewables. There will be no further need for 20% state budget co-financing.

The above clearly confirms a positive trend in the resolution of payment shortfalls to renewables producers and allows for the long-term financing of the Guaranteed Buyer while improving the standing of renewables projects.