Ukraine’s electricity grid operator Ukrenergo has announced plans to issue approximately 500 million euros ($606 million) in five-year ‘green’ energy bonds in order to raise money for payments to renewable energy producers.
The move was announced on June 11 by acting director of Ukrenergo Volodymyr Kudrytsky at the 12th European-Ukrainian Energy Day in Kyiv.
Kudrytsky said that the bond issuance will allow Ukrenergo to pay off the remainder of its debts for 2020 to the Guaranteed Buyer, the state-owned purchaser of renewable electricity.
In its turn, the Guaranteed Buyer will then be able to pay its debts to renewable energy producers.
He told the audience that at present he did not know what interest rate the bonds would offer, stating that this “will be a matter of negotiations, market assessment, and will also depend on what will be the rate of Ukraine’s sovereign bonds during the period when we will place our own.”
Kudrytsky also expressed hopes that by the end of 2021, the balancing market, which is designed to smooth gaps between the scheduled supply and actual demand of electricity, will have its flaws ironed out and provide much-needed liquidity for Ukrenergo to pay energy producers.
As of June 1, Ukrenergo owed the Guaranteed Buyer Hr 15.7 billion ($581 million), of which Hr 4.1 billion ($152 million) was run up in 2021.
In 2020, Ukrenergo registered losses of Hr 27.5 billion ($1.02 billion), compared to a profit of Hr 1.86 billion ($69 million) in 2019.
Since 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, who are unhappy with the state’s failure to pay the funds it contractually owes.
According to Ukrainian Wind Energy Association chairman Andriy Konechenkov, four of the six largest banks in Ukraine — Oschadbank, Ukreximbank, Ukrgazbank, and Privatbank — have all “said they are halting the financing (of renewable energy projects) until the situation on the market is fixed.”
