As of July 16, solar and wind energy producers have already filed 130 legal actions worth $66 million against Ukraine’s Guaranteed Buyer, the energy consulting company Expro reported.
The Guaranteed Buyer, the state company created to buy electricity from renewable developers, owes roughly $700 million to investors after failing to pay back debts in 2019-2020.
Since the new electricity market rules came into place in July 2019, the Guaranteed Buyer’s debts to renewable energy producers have been a running problem for the Ukrainian government and a major cause of concern for investors, unhappy with the state’s failure to pay the funds it contractually owes.
To pay back renewable energy producers, the Guaranteed Buyer is looking for ways to reach compromise solutions with its own debtors.
On June 11, in order to pay back its debt the Guaranteed Buyer, Ukraine’s electricity grid operator Ukrenergo announced its plans to issue approximately 500 million euros ($606 million) in five-year ‘green’ energy bonds.
As of June 1, Ukrenergo owed the Guaranteed Buyer $581 million (Hr 15.7 billion), of which $152 million (Hr 4.1 billion) was run up in 2021.
The bonds will allow Ukrenergo to pay off the remainder of its debts for 2020 to the Guaranteed Buyer. In its turn, the Guaranteed Buyer will then be able to pay its debts to renewable energy producers.
Ukraine started to foster green energy production in 2008, when it introduced green tariffs, obliging the Guaranteed Buyer to buy renewable electricity at the highest price in Europe — 0.46 euros per kilowatt.
The tariff has been lowered since then to roughly 0.13 euros per kilowatts, but it’s still one of the highest in Europe.
Ukraine’s energy went from less than 2% to almost 10% renewable in a year and a half and many investors were foreign companies.
But the growth was unsustainable, due to its generosity, its euro denomination and Ukraine’s deeply problematic energy market. When the pandemic hit, the Guaranteed Buyer fell short of the money to pay the tariff, riling up foreign investors.
By the end of 2019, almost $10 billion had been invested in renewable energy, according to Oleksandr Kozakevich, chairman of the Ukrainian Association of Renewable Energy.
In 2020, approximately 7.3% of Ukraine’s electricity was being generated from renewable sources (12.4% including large hydro), with the goal of 25% by 2030.
