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Since the start of this year, Ukrenergo’s ‘Guaranteed Buyer’ unit has paid for only 27% of the power it took from solar and wind producers. For the last four months, this unit known as ‘GarPok,’ has only paid 5% of its debts to renewable energy producers, according to its website. As of July 20, this debt was $657mn. Under the ‘Green Tariff’ law signed Friday by President Zelenskiy, the government commits to repaying this debt by the end of next year.
9.1.10 Renewables sector news
President signs law on lower green power tariffs. The legislation that overhauls the conditions for green electricity producers was signed by the president and implemented as of August 1. Among its key conditions are reducing feed-in tariffs for wind and solar power stations at preferential, predetermined prices till the end of 2029. In particular, for wind farms, tariffs will be 7.5% lower for those commissioned in 2H15-2019 (no changes for older capacities), and 2.5% lower for those commissioned as of 2020. For large solar stations (over 1 MW), the tariff will be 15% lower for those commissioned in 2H15-2019, 2.5% lower for those commissioned by end-October 2020, 30% lower for those commissioned between November 1, 2020 and March 31, 2021 (with capacity of no more than 75 MW) and 60% lower for those commissioned as of April 2021 (and those commissioned as of November 2020, with capacity exceeding 75 MW).
The new law also assumes that the state budget will provide financing to the guaranteed buyer of green electricity in the amount of at least 20% of the expected revenue of all green sources. Recall, the government initiated a revision of green rates based on a memorandum signed with some green energy producers in June. The initiative preceded a crisis on the electricity market, which resulted in a significant reduction of payments for green energy sources from the guaranteed buyer as of March 2020. Based on the memorandum, cuts in green tariffs should only follow the resumption of full payments for green electricity and restructuring of accumulated arrears.
Despite last month’s tariff cuts on renewables – 15% for solar, 7.5% for wind – foreign investors continue pouring millions of dollars into new projects. But one red flag: not only is Ukrenergo almost $1bn behind on paying back bills, it is falling behind on new bills. Yesterday, Prime Minister Shmygal reviewed options: a $1bn ‘Green Bond,’ or simply taking the money from Ukraine’s $28.5bn reserves. Either way, a solution has to be found. In recent years, renewables constituted the biggest bright spot for bricks and mortar foreign direct investment into Ukraine.
Naftogaz signs off on a €50mn green energy loan with the EBRD.
Naftogaz Group and the Finance Ministry of Ukraine have concluded a loan agreement with Ukraine's biggest international financial investor, the European Bank for Reconstruction and Development (EBRD). Ukrgasvydobuvannya JSC, which is part of Naftogaz Group, will receive EUR 51.9m from the EBRD for activities aimed at decreasing Ukraine's dependence on imported energy. Despite the current economic crisis, Naftogaz continues to increase international investment to maintain domestic gas production and improve energy efficiency.
65 UKRAINE Country Report September 2020 www.intellinews.com