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in unpaid electricity bills. Under the new law, all these unpaid debts are to be paid in full by the end of next year. The repayment schedule is: 40% in the fourth quarter of this year, and 15% in each quarter of 2021. It is unclear where Ukrenergo, the mother company for the Guaranteed Buyer, will find the money.
Most notably, the bill didn’t include a proposed two-year delay for reducing green energy prices, as had been requested by the industry. It also keeps the current operating restrictions for solar power stations producing under one MW. Yet it retroactively changes the conditions of stations operating above 1 MW that were launched as of 2015, reducing prices between 15% to 50% for solar-produced electricity and by 7.5% for wind-produced electricity.
Parliamentary Energy Committee Head Andriy Gerus justified these cuts by stressing that prices for green energy in Ukraine are double or even triple that of other European countries. “It’s not catastrophic at all for market participants,” he said. The bill also halts all constructions of solar power stations and allows for the completion of wind power stations already begun.
The bill drew 288 votes with the backing of the majority of MPs from all five factions, including 248 MPs from The People’s Servant (compared to the 226 votes that are necessary). It was also backed by the President’s Office. Three amendments to the legislation were also approved. It was heavily criticized by the Ukrainian Association for Renewable Energy, which estimated the legislation would cost the state UAH60bn in profit tax revenue through 2029.
With its vote, parliament ignored the concerns raised by foreign ambassadors and business after attempts mediation, particularly regarding retroactive changes to contracts, the association’s co-founder, Ihor Tynniy, said on his Facebook page. “It’s not understood why we were tortured with working groups, discussions and meeting with experts when everything is decided in one office behind closed doors,” he said.
Foreign companies are sure to file lawsuits, possibly resulting in rulings that cost the state any revenue gains from the measure. “The country’s investment image has been dealt irreparable damage, which will require quite a number of years for the West to forget this betrayal,” Tynniy said. He later added, “The conclusion is that no serious projects in Ukraine are worth launching, unless you have Dnipro oligarchs as your partners. The remainder of investors are in a risk zone.”
65​ UKRAINE Country Report​ August 2020 ​ ​www.intellinews.com