In its Editorial Board publication BloombergView states that current international assistance to Ukraine, country suffering from external military aggression, is obviously not sufficient. The EU has given the government in Kiev just 2.21 billion euros ($2.47 billion) of new, direct financial aid -- a tiny sum when compared with the hundreds of billions Europe has spent bailing out Greece. The International Monetary Fund is coordinating a $40 billion bailout designed to keep Ukraine solvent, however the Fund's own $17.5 billion program accounts only for less than half of that sum, The rest is supposed to come from bilateral donors, but this is falling short. In addition to the EU money, the U.S. is providing $3 billion in loan guarantees. Read more at http://www.bloombergview.com
On May 12th 2015, the Cabinet of Ministers adopted Resolution No. 271 “On Conducting a Transparent and Competitive Privatisation in 2015”, approving a list of over 300 state-owned entities subject to privatisation in 2015. Some of the largest companies to be privatised are those belonging to the energy sector. However, Ukraine should not be overwhelmed by the motivation to make quick money for the state budget. Instead, the focus should shift to benefits that the state can secure in the long run. It is time for Ukraine to finally escape the legacy of corrupt privatisation in favor of oligarchs. The ultimate goal of privatisation in energy sector must always be the development of fully functioning energy markets. Therefore, de-monopolisation must mean ensuring access to the markets for new players. Every asset must be prepared for privatisation to make it as economically attractive for investors as possible long before any privatisation takes place. Read more at http://www.neweasterneurope.eu
Last month, the U.K. stopped the Green Deal, an ambitious energy efficiency program that never took off the way the government had hoped. The U.K.’s government wanted to build a public-private partnership that would give homeowners £10,000 to support energy efficiency improvements, with no upfront costs. Because the U.K.'s climate is not extreme, weatherization retrofits did not bring rapid savings. The U.K. had a modestly successful weatherization program that predated the Green Deal. The energy retailers provided heavily subsidized wall insulation, and this cash-back program, was much more popular than the loans. That is why, when the Green Deal started, the number of weatherization projects fell 97 percent from the year before. Read more at http://www.greentechmedia.com/
Part 1 of the report gives general Ukraine’s electricity sector review, wind energy resource information and describes the current situation with wind power generation. Part 2 is focused on relevant country’s legislation, including Green Tariff Law and Tax Code of Ukraine, as well as on major wind power projects and wind turbine manufacturing capacities.
George Soros, Chairman of Soros Fund Management LLC and the Open Society Foundations, published article in The Wall Street Journal, presenting his view on current situation with Ukrainian debt negotiations. Famous American financier and philanthropist thinks that Russian aggression has taken a terrible toll on the economy of the new Ukraine, making its $19 billion in foreign debt unsustainable.
The Ukrainian government is fighting heroically for the structural reforms rooting out corruption, reforming the judicial system, weaning the country from Russian gas, integrating the economy into the European Union, boosting agriculture, cleaning up the banking system, and more. “If going into default is the only way to get debt relief, then investors will applaud, not condemn, Ukraine for doing it” - Soros says. Read more at http://www.wsj.com
German organization Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH began the new project in Ukraine to assist municipalities in implementation of energy efficiency services through energy performance contracting.
GIZ leads the team of experts from 9 European countries to train 300 Ukrainians how to work with energy performance contracts. Project is funded by EU Horizon 2020 Program. Read more at http://eeim.org.ua
Finance Minister Natalie Jaresko came to San Francisco, California to have a meeting with creditors, which owns around $9 billion of Ukrainian bonds. She called upcoming meeting as a "last opportunity" to avoid a breakdown. Ukraine has around $19 billion in outstanding debt. Most of that debt is owed to the U.S. investment fund Franklin Templeton, which holds $7 billion. Another large part is owned by 14 different investment funds. Of that total, $3 billion is owed to Russia, which have repeatedly refused to consider restructuring that part of the debt. Ukraine’s currency, the hryvnia, has fallen by more than 60pc against the dollar since the start of last year – has rapidly rendered the country’s debt pile unsustainable. As much of Ukraine’s debt is dollar-denominated, paying it back is increasingly hard. Ukraine continues to face a battle on two fronts, both with a Russian aggressor and the country’s creditors, one of which is Russia. Its $70bn debt is now the subject of intense debate. Read more at http://www.telegraph.co.uk
Minister of Energy and Coal Industry Volodymyr Demchyshyn announced that Ukraine in January-July 2015 reduced total natural gas consumption by 20%, in particular industry - by 26%, residential consumers - by 20%, heating enterprises - by 12%. Total gas consumption during the first seven month of this dropped to 20.818 billion cubic meters, comparing to 26.022 billion cubic meters during the same period of the last year. He also said that the expected price for natural gas imported from Europe in the fourth quarter of 2015 and in the first quarter of 2016 is USD 250 per thousand cubic meters.Total electricity consumption fell down by 11.7 %, from 100.8 to 89.0 billion kWh. Read more at http://mpe.kmu.gov.ua/
Basil A. Kalymon and Oleh Havrylyshyn, two well known western professors, who have Ukrainian roots, presented their view on current economic situation in Ukraine. They think that, despite Russia's hybrid war against Ukraine has largely triggered the economic and financial crisis, “the root cause of Ukraine's economic malaise is its culture of corruption, which has persisted for decades and has earned Ukraine the dubious distinction of being ranked among the most corrupt economies in the world. At the core of Ukraine's debt issue is the massive theft of state assets over time. The state sold valuable holdings to oligarchs for next to nothing. At the same time, the government amassed large amounts of external debt.”
Professors consider critically important steps to reduce the oligarchs' power and resolve the economic crisis: - recover all funds illegitimately pilfered by Yanukovych and his gang
- review the effectiveness of all key state enterprises and appoint new managers to run them
- fix unfair and ineffective taxation system
- prevent oligarchic interests from transferring funds to offshore entities
- change the situation, when oligarchs’ interests continue to be protected at the highest levels of government. Read more at http://www.atlanticcouncil.org
State Enterprise “National Nuclear Energy Generating Company “Energoatom” is the operator of all running nuclear power plants (NPP) of Ukraine. One of its priorities is to complete units 3 and 4 of Khmelnytsky NPP, construction of which began in 1985-86 and then was stopped in 1990, when they were 75% and 28% complete, respectively. In June 2010, Russia and Ukraine signed an intergovernmental agreement on the resumption of work on the two partially built reactors. In July 2014, Ukraine's Cabinet of Ministers announced its support for the idea of building new reactors using technology "of Western design". Later "Energoatom" and Czech engineering company Škoda JS signed a memorandum of cooperation regarding construction of new nuclear reactors. Read more at http://www.world-nuclear-news.org
Package of the so-called energy modernization laws in effect since May 9 allows energy service companies to invest into reconstruction of municipal energy utilities under energy service contracts and obtain 80 percent profit from savings in 10 years, while the rest goes to state budget. With the implementation of these laws, it is expected more projects and private companies willing to invest into energy efficiency measures. Still, secondary legislation is to be adopted, including model energy service contracts, methodology of calculation of savings, and budget nomenclature for reimbursements.Draft law on energy efficiency of buildings sets down minimum energy efficiency requirements for a newly constructed buildings. Read more at http://www.kyivpost.com
Report-presentation in English is posted on Ministry’s web site (link at the bottom of the page)
