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power distributing companies were operating grids in the city of Kyiv, as well as the Dnipropetrovsk and Donetsk regions. The unbundling was performed to comply with the requirements of a new law, On the Electricity Market, the holding said. This law, adopted in April 2017, stipulates that power distribution businesses should be explicitly separated from power generation and supply. Following the transaction, DTEK said its grid companies were automatically excluded from the list of suretyship providers under the holding’s Eurobonds.
The Antimonopoly Committee of Ukraine ruled to close its investigation against DTEK on December 28, the committee reported the same day. The investigation was opened in 2015 at the request of state-controlled high-voltage power grid company Ukrenergo, which claimed that DTEK was abusing its monopoly position on the electric energy market. Ukrenergo claimed that increased outages of DTEK-controlled power units in 1H15 had led to heightened risks to the stability of Ukraine’s energy system at that time. The committee concluded that DTEK does not have market power in Ukraine’s electricity segment, which is tightly regulated. Based on this, the committee concluded that there couldn’t have been any abuse of market power by DTEK.
Ukraine’s leading coal and power producer DTEK Energy produced 33.78 TWh of electricity in 11M18 , Concorde Capital calculated based on sector-wide data provided by Ukraine’s Energy Ministry. This is 6.7% less y/y and 1.5% below the ministry’s plan. DTEK’s power units produced 27.70 TWh of electricity from hard steam coal (up 1.8% y/y) and 3.86 TWh from anthracite coal, which is scarce in Ukraine (-35.3% y/y). Power generation at DTEK’s heat and power plants (mostly gas-fired) dropped 26.3% y/y to 2.23 TWh, mainly because Kyivenergo stopped operating its Kyiv-based plants since August 2018. In November alone, DTEK Energy’s power plants produced 3.42 TWh of electricity, which is 19.4% more than October, and 5.5% more than the ministry’s plan. Aggregate power generation in Ukraine increased 2.2% y/y to 139.04 TWh, while Ukrainian thermal power plants boosted their generation 4.2% y/y to 42.82 TWh, mainly due to 39.4% y/y higher output by state-controlled Centrenergo (CEEN UK) and a 2.6x boost by Donbasenergo (DOEN UK).
Ukraine’s DTEK purchases two Ukrainian power DisCos from Russians. Ukraine’s biggest energy and utility holding DTEK announced on January 4 that its subsidiaries signed an agreement to acquire a 94.0% stake in power DisCo Kyivoblenergo and a 68.3% stake in power DisCo Odesaoblenergo from their Russian owners, of Concorde Capital said in a note. The acquirers are DTEK Oil&Gas LLC and NGR B.V., companies that belong to DTEK Group, but are not consolidated by the group’s Eurobond issuer DTEK Energy (DTEKUA). The deal’s value was not announced. Currently, the controlling stakes in Kyivoblenergo and Odesaoblenergo are held by VS Energy Group, which controls five other power DisCos in Ukraine. VS Energy purchased a 89% stake in Kyivoblenergo from US-based AES Corp. (AES US) in 2013 and acquired a 35% stake in Odesaoblenergo at a privatization tender in 1998. VS Energy is controlled by a group of Russian investors that includes Aleksandr Babakov, a member of the upper house of the Russian parliament who has been included in the sanctions lists of the US and EU for his involvement in Russian aggression against Ukraine. “Kyivoblenergo and Odesaoblenergo are VS Energy’s biggest distribution assets (54% of the group’s total power distributed in 11M18) and among Ukraine’s biggest power DisCos (ranked 6th and 7th by energy transmitted out of 33 total). Their divestment by VS Energy implies the group has decided to significantly scale down its exposure to
78 UKRAINE Country Report February 2019 www.intellinews.com