Contour Global, a New York-based private energy company, said their investment would be one of the largest projects of its kind in Ukraine
Contour Global, a New Yorkbased private energy company, has announced its intention to invest $300 million into
Ukraine’s vast energy sector within the next two years with a focus on modernizing old combined heat and power plants and constructing new cogeneration facilities.
Company officials said their investment would be one of the largest projects of its kind into energy efficiency in Ukraine. Highly dependent on increasingly costly fuel imports, Ukraine’s vast energy sector is badly in need of upgrades and modernization, they added. The introduction of energy efficiency technologies is viewed as a means of weaning the country off of fuel imports from Russia and Central Asia, which have been hiking up prices in recent years.
“We see prospects in Ukraine for electricity and heat generation because the [natural] gas prices in Ukraine are reasonable, but the efficiency of the infrastructure is not…We are going to improve efficiency,” Oleksandr Krakovsky, Contour Global vice president for Eastern Europe and the CIS, told the Post.
Contour Global hopes to closely cooperate with local municipal authorities. Helping to cut down wasteful energy use at aging Soviet-built communal heating supply enterprises scattered across the country is one area in desperate need of investments. Contour is also eyeing the prospects of purchasing energy generation enterprises in the future.
The American company has been operating in Ukraine since October 2005, when it was founded. So far, Contour Global has launched a joint venture with Kramatorsk city municipality to run the Kramatorsk combined heat and power plant in Donetsk Region. The company also recently started construction of a cogeneration plant with 28-megawatt capacity that will use exhausts from Bohorodchany compressor house in western Ukraine. So far, Contour Global has invested several millions of dollars into Ukraine’s economy, and within next two years the company will invest $300 million, according to Krakovsky.
According to the Economy Ministry, total foreign direct investment into generation and distribution of electric energy, natural gas and water has totaled $433.8 million from 1994 until the beginning of this year. Contour Global’s investment package can thus become the biggest in the sector.
Volodymyr Saprykin, director of energy programs at Kyiv-based Ukrainian Center for Economic and Political Studies, also known as the Razumkov Center, said that equipment at Ukrainian heat power plants is worn out and badly in need of modernization.
“Currently there is not enough investment into energy sector,” he said.
As to Contour Global’s investment, Saprykin said that “the foreign investments are always good…The energy sector in general needs substantial investment.”
However, he added that currently it was unclear how this investment would be implemented. Like many investors eyeing Ukraine, the company has merely declared its bold intentions regarding the $300 million, which the company plans to invest in the next two years.
“Currently it is unclear how this money will be invested. We need to be talking about [investment] in concrete enterprises,” Saprykin added.
In addition to Ukraine, Contour Global has projects in US, Brazil, Columbia, Peru, and Togo. Reservoir Capital Group, a private investment company that manages some $3 billion, is Contour Global’s main shareholder.
