Bringing market reform in the energy sector a step closer, Ukraine unveiled its first national nuclear power company Energoatom – at a ceremony in the capital on Friday. The new entity is to operate the country’s five nuclear power plants on a commercial basis. Although a state-owned monopoly directly subordinate to the Energy Ministry, it is structured along the lines of a western business. The company, complete with corporate logo and internet web page, was molded from the Energy Ministry’s Derzhkomatom agency and borrowed its structure from the world’s only private nuclear power company, British Energy. The new firm was set up under the European Union’s TACIS program, with funding from Britain’s Know-How Fund and advice from British Energy consultants.
Speaking at Energoatom’s launch, company President Nur Nigmatullin stressed the importance of the new firm to the Ukrainian economy: ‘Further economic development in Ukraine is impossible without a reliable and efficient nuclear energy industry.’
Reliability and efficiency apart, Energoatom will be charged with ensuring high levels of safety in Ukraine’s nuclear power generating sector. British Energy has helped create Energoatoms’s new safety and quality assurance programs, and profits from electricity sales are to be channeled towards building replacement reactors to compensate for the future closure of the aging third reactor at the Chernobyl plant north of Kyiv. The company’s corporate structure will also help attract foreign investment, said British Energy Representative Office Director Roman Skillski.
‘Ukraine wants to complete reactors at the Khmelnytsky and Rivne nuclear plants, and any [potential] foreign investor … would likely place more trust in an organization run along Western lines,’ he said.
Energoatom has the potential to follow British Energy down the road to privatization, believes Skillski: ‘As a result of this transformation [from state agency to commercial firm], we have a company which can be privatized in the future,’ he said. ‘You couldn’t have privatized a ministry, but it’s possible with a commercial company.’ However, Mykola Oberkovych, a spokesman for Energoatom, believes talk of privatization is premature. ‘It will be another three-to-five years before privatization becomes possible,’ he said. He said privatization would only be possible after the balance sheets of all five nuclear companies are consolidated and the government stops providing energy subsidies to consumers.
The state currently subsidizes around 20 percent of the cost of electricity supplies to consumers.
