{"id":23559,"date":"2020-10-05T18:51:07","date_gmt":"2020-10-05T15:51:07","guid":{"rendered":"https:\/\/euea-energyagency.org\/?p=23559"},"modified":"2020-10-09T10:20:01","modified_gmt":"2020-10-09T07:20:01","slug":"euea-together-with-uwea-today-sent-a-letter-to-the-prime-minister","status":"publish","type":"post","link":"https:\/\/euea-energyagency.org\/en\/news\/market-news\/euea-together-with-uwea-today-sent-a-letter-to-the-prime-minister\/","title":{"rendered":"EUEA together with UWEA today sent a letter to the Prime Minister"},"content":{"rendered":"

05 October 2020<\/span><\/p>\n

Denys Shmyhal, Prime Minister of Ukraine<\/span><\/p>\n

Copy:<\/span><\/p>\n

Andriy Yermak, Head of the Office of the President of Ukraine<\/span><\/p>\n

Serhiy Marchenko, Minister of Finance of Ukraine<\/span><\/p>\n

Olga Buslavets, Acting Minister of Energy of Ukraine<\/span><\/p>\n

Valeriy Tarasyuk, Chairman of the NEURC<\/span><\/p>\n

Yuri Aristov, Chairman of the Verkhovna Rada Committee on Budget Affairs\u00a0<\/span><\/p>\n

Andriy Gerus, Chairman of the Verkhovna Rada Committee <\/span>
\n<\/span>on Energy, Housing and Utility Services\u00a0<\/span><\/p>\n

 <\/p>\n

Dear Mr. Prime Minister,<\/span><\/p>\n

 <\/p>\n

We address you on behalf of 30+ companies in the renewable energy sector in Ukraine, which are members of our respective industry associations, the European Ukrainian Energy Agency (EUEA) and the Ukrainian Wind Energy Association (UWEA). Our associations have worked in a constructive and collaborative manner with the State authorities of Ukraine since the onset of substantial payment delays from the State enterprise \u201cGuaranteed Buyer.\u201d The culmination of this work was the signing of a Memorandum of Understanding (MOU) between the Government, the Regulator and abovementioned Associations on 10 June 2020 and the adoption by the Parliament of Law of Ukraine No810-IX on 21 July 2020, which substantially reduced the feed-in tariffs (FITs) for renewable energy producers.<\/span><\/p>\n

Only two months after the Law of Ukraine No 810-IX has come into force it is most unfortunate that there has been little progress from the Government to implement its commitments under the MOU, despite the fact that the FIT reductions for renewable producers were implemented right away by the Regulator on 1 August 2020 in accordance with Law of Ukraine No810-IX.<\/span><\/p>\n

Your Government made a firm commitment to our associations to restore full payments by the Guaranteed Buyer to renewable energy producers in the very next month following the passage of Law of Ukraine No 810-IX. However, the Guaranteed Buyer has not yet established payment discipline, as was promised. The Guaranteed Buyer has only covered its payment obligations for electricity delivered in August, and payments for September deliveries are now at <\/span>just 27%<\/b> of its obligations. Even more concerning, the Guaranteed Buyer has provided forecasts whereby the average level of payments for the period from August to December 2020 would be only 56% of its obligations, which would lead to an accumulation of an additional UAH 9.6 billion of debt to renewable producers by the end of 2020. While these payments are indeed an improvement from the period from March through July 2020 \u2013 when the FIT was under negotiation and payments were less than 10% of obligations \u2013 we agreed in the MOU that the Government would ensure that the Guaranteed Buyer would meet <\/span>100%<\/b> of its payment obligations on monthly basis.\u00a0<\/span><\/p>\n

The necessary funds to restore the solvency of the Guaranteed Buyer may come from a combination of TSO transmission tariff increases and a 20% State budget co-financing of the FIT payments per Law of Ukraine No 810-IX. So far, the Regulator has made no statements indicating that it plans to increase the TSO tariff to the necessary level. While the Verkhovna Rada Committee on Energy, Housing and Utility Services<\/span> has recently proposed to include 20% co-financing of renewables obligations in the State budget for 2021 the Ministry of Finance has not yet expressed support for the necessary allocation of such funds to the State budgets for 2020 and 2021.<\/span><\/p>\n

Moreover, during the term of the mediation process when the Guaranteed Buyer reduced its payments to renewable energy producers to less than 10% of its obligations, arears accumulated totalling UAH 22.4 billion. We agreed in the MOU that the Government would assure that the Guaranteed Buyer would pay 40% of these arrears in Q4 2020 and that the remaining 60% would be spread equally among each of the four quarters of 2021. To date, we have not been informed of any firm decisions that your Government has taken with regard to securing the sources of these repayments, which may include, for example, the issuance of government bonds in domestic or foreign markets or the attraction of loans to the TSO from State-owned banks or international financial institutions. We appreciate that each of these prospective sources of funding must be confirmed by the Ministry of Finance and that respective State guarantees, if required, must be approved by the Parliament. To date, we understand that such approvals have not been initiated.<\/span><\/p>\n

A majority of the members of our associations supported the FIT reductions imposed by the Government through the MOU <\/span>on the sole basis<\/b> that its signing would lead to an <\/span>immediate<\/b> stabilization of the renewables crisis by restoring <\/span>full<\/b> payments from the Guaranteed Buyer. We signed this MOU on behalf of our members in the good faith that the Government would indeed honor its obligations to their fullest extent.\u00a0<\/span><\/p>\n

Mr. Prime Minister, the stark reality is that your Government is now in breach of the MOU.\u00a0<\/b><\/p>\n

If the payment discipline of the Guaranteed Buyer is not restored right away, with support from credible funding sources to ensure the ongoing stability of payments, it will lead to a series of negative consequences that we sought to avoid when negotiating the MOU, including defaults of renewables producers under bank loans, the triggering of political risk insurance clauses under IFI financing, and the likely initiation of arbitrations against Ukraine under Bilateral Investment Treaties and the Energy Charter.<\/span><\/p>\n

We respectfully request you to ensure that the provisions of the MOU and Law of Ukraine No 810_IX are implemented in full without any further delay. We and our members remain available to you and fully committed to the success of a vibrant renewable energy sector in Ukraine.<\/span><\/p>\n

Yours sincerely,<\/span><\/p>\n

Konechenkov A.<\/b><\/p>\n

Board Chairman UWEA<\/span><\/p>\n

Vice-President WWEA<\/span><\/p>\n

 <\/p>\n

Gumenyuk O.<\/b><\/p>\n

Director EUEA<\/span><\/p>\n

 <\/p>\n

\u041a\u043e\u043d\u0442\u0430\u043a\u0442\u043d\u0456 \u0434\u0430\u043d\u0456 \u0430\u0441\u043e\u0446\u0456\u0430\u0446\u0456\u0439:<\/b><\/p>\n

Office of Association \u00abEuropean-Ukrainian Energy Agency\u00bb (EUEA):<\/span><\/p>\n

Volodymyrska street 61-\u0431, 6 floor, Kyiv 01033, Ukraine\u00a0<\/span><\/p>\n

Tel.: +38 095 607 78 57\u00a0<\/span><\/p>\n

email: <\/span>office@euea.wsp.pp.ua<\/span><\/a> \u00a0<\/span><\/p>\n

www.euea.wsp.pp.ua<\/span><\/a>\u00a0<\/span><\/p>\n

 <\/p>\n

Office of Associaiton \u201cUWEA\u201d Business-Center Spaces Maidan Plaza\u00a0:\u00a0<\/span><\/p>\n

Maidan Nezaleznosti, 2, Kyiv, 01012, Ukraine<\/span><\/p>\n

Tel. +38 044 2232996<\/span><\/p>\n

email: <\/span>info@uwea.com.ua<\/span><\/a><\/p>\n

www.uwea.com.ua<\/span><\/p>\n

 <\/p>\n

Download a letter to the Prime Minister<\/a><\/p>\n

Monitoring the implementation of the Memorandum<\/i><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

05 October 2020 Denys Shmyhal, Prime Minister of Ukraine Copy: Andriy Yermak, Head of the Office of the President of […]<\/p>\n","protected":false},"author":135,"featured_media":23607,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[125],"tags":[],"class_list":["post-23559","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-news"],"acf":[],"yoast_head":"\nEUEA together with UWEA today sent a letter to the Prime Minister - 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