Page 69 - UKRRptMay19

Russian supplies with overseas supplies via Ukrainian ports – its other power plant, Luhanska, has no such option. The Luhanska plant is located near the Russian border and Russian-occupied territory. Its only reliable railway connection is with Russia, with coal deliveries impossible from Ukrainian ports bypassing Russia or the occupied territory. So, if DTEK won’t be able to supply coal to Luhanska from Russian territory (either from DTEK-related mines, or from other Russian suppliers), the plant will have to either switch to burning natural gas (which is too expensive) or halt its operations altogether. All in all, we continue to consider DTEKUA Eurobonds as the most exposed to political risks of 2019.
DTEK gains approval to purchase two power DisCos. Ukraine’s Antimonopoly Committee decided on April 25 to allow DTEK Oil&Gas, a subsidiary of DTEK group, to purchase controlling stakes in two large power distribution companies, Kyivoblenergo and Odesaoblenergo (ODEN UZ). By allowing the deal, the committee admitted that DTEK’s share in Ukraine’s distribution segment will significantly increase as a result. To prevent threats of such high concentration on the market, the committee required DTEK’s grid companies to disclose each case of not signing a deal with independent electricity suppliers. It also decided to restrict DTEK’s representation in the Wholesale Electricity Market Council to four members (out of ten). Kyivoblenergo and Odesaoblenergo are the sixth- and seventh-. largest power distribution companies in Ukraine respectively (out of a total of 33), accounting for 9.7% of electricity distributed in Ukraine in 2018. The controlling stakes in these companies belong to VS Energy, a company with Russian roots.
9.2.10 Renewables corporate news
Norway's Scatec Solar inked agreements for Ukrainian projects with total capacity of 251 MW in 2018, according to the company's annual report. Two of these projects secured financing in 2018 and moved into construction with 174 MW in project backlog. Total CapEx for the projects is estimated to €193mn. Scatec Solar is developing projects totalling 163 MW in addition to the 251 MW in project backlog and under construction. Scatec Solar is an integrated independent solar power producer, delivering affordable, rapidly deployable and sustainable sources of clean energy worldwide. The company develops, builds, owns, operates and maintains solar power plants, and already has an installation track record of close to 1,000 MW. Currently, the Oslo-headquartered company is producing electricity from 322 MW of solar power plants in the Czech Republic, South Africa, Rwanda, Honduras and Jordan, and has another 1,092 MW under construction. With an established global presence, the company is growing briskly with a project backlog and pipeline of about 4 GW under development in the Americas, Africa, Asia and the Middle East.
With Chinese equipment, DTEK inaugurated Europe’s second largest solar power station in April in Nikopol, Dnipropetrovsk region. Costing $243mn, the 200 MW capacity plant is second only in Europe to France’s 300 MW plant in Cestas, Gironde region. China Machinery Engineering Corporation built the 400-hectare plant, using 160 PV inverters manufactured by China’s Shenzhen Kstar Science and Technology and 750,000 solar panels made by China’s Seraphim Solar System and Trina Solar. CMEC President Han Xiaojun told Xinhua news agency: “The Nikopol plant is based on advanced solar modules and inverters made in China, as well as on advanced power plant control systems.”
69 UKRAINE Country Report May 2019 www.intellinews.com