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01.10.2021

100% settlement of Energorynok’s debts to RES producers

On 1 July 2019, fundamental changes in the energy sector of Ukraine took place pursuant to the Law of Ukraine “On the Electricity Market”, which provided for shifting from the centralized single buyer model to a wholesale market model. However, the new electricity market in Ukraine was launched without having addressed the problems of the previous market model, in particular the nonrepayment of old debts of the SE Energorynok (ed. a “single buyer” in the previous model) to RES producers, equal to UAH 2,3 billion as of 1 July 2019. This problem arose due to the expiration of the legal acts, which regulated the activity of the SE Energorynok and an extremely low level of payments for the RES electricity delivered in June 2019 by the distribution system operators and universal service providers.

In addition, the Cabinet of Ministers of Ukraine failed to elaborate in time, and the Verkhovna Rada correspondingly failed to adopt the Law on Repayment of these debts envisaged in paragraph 16 of Section XVII of the Final and Transitional Provisions of the Law of Ukraine "On the Electricity Market". Such legislative delay had a negative effect on the energy sector as a whole and threatened SE Energorynok to block its activity due to the potential seizure of accounts and bankruptcy of the enterprise.

RES producers striving to receive the payment for "green" electricity delivered, pursued legal action against the SE Energorynok. Such actions added further  pressure on the enterprise.

To prevent the seizure of accounts and ensure its financial self-sufficiency SE Energorynok repeatedly informed the Office of the President of Ukraine, the Cabinet of Ministers of Ukraine, the Security Service of Ukraine, the Ministry of Energy and Coal Industry of Ukraine (currently the Ministry of Energy), NEURC about the critical situation with the debts to the RES producers accumulated in June 2019 and lack of funds to settle them. Realizing its responsibility and striving to fulfill its financial obligations, the company called for the immediate adoption of the special legislation to allow the SE Energorynok to pay for the “green” electricity. Finally, the required Law was elaborated and adopted by the profile committee of the Verkhovna Rada. The SE Energorynok actively participated in the law drafting with the involvement of all stakeholders.

The Ukrainian Wind Energy Association was also involved in the crisis settlement process and supported the SE Energorynok in its legal initiatives. The UWEA requested the RES producers to withdraw the complaints they had filed against the enterprise, thus giving a time for the state bodies and the SE Energorynok to find the debts repayment sources. The UWEA’s clear and straightforward approach was based on the fact that the SE Energorynok had never violated Ukrainian legislation and always paid in full.  The UWEA was firmly convinced of the inevitable positive solution to the  problem and the fulfillment of its financial obligations by the enterprise.

The Law of Ukraine “On measures aimed at repaying debts generated in the wholesale electricity market” provided for the priority debt repayment to RES producers and was adopted on 7 June 2020. It happened one year after the launch of the new electricity market, at the time when the Government and the RES investors were engaged in negotiations in respect to the debts to RES producers accumulated  this time  by the SE Guaranteed Buyer, the successor of the SE Energorynok.

On 13 August 2021, the SE Energorynok repaid 100% of its debts to RES producers in full in line with the national legislation.

The Ukrainian Wind Energy Association congratulates the SE Energorynok on the fulfilling its financial obligations to the RES producers and is grateful to the RES producers for their understanding and patience!