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  • Cooperation with KfW

    The strategic partnership between Ukrenergo and KfW goes back a long way. Cooperation with German donors helps us implement important technical and infrastructure projects aimed at enhancing reliability of the power generation and transmission systems, the most important areas of activity of a system operation. Presently, Ukrenergo is the only company to receive a EUR 150 million loan from the German government’s tranche provided to restore infrastructure in Eastern Ukraine, and to launch the active phase of this project.

    Description of project:

    Reconstruction of four transformer substations:

    – Zaporizka 750 kV SS and Dniprovska 750 kV SS of Dniprovska PS

    – Kharkivska (formerly Artema) 330 kV SS and Zaliutyne 330 kV SS of Pivnichna PS

    The consultant (the consortium of MVV Decon and Consulectra Unternehmensberautung GmbH, Germany), financed from grants provided by the Research and Consultation Fund of the Federal Ministry of Economic Cooperation and Development of Germany (controller of funds: KfW), is currently preparing a feasibility study and the tender documentation.

    Expected Project completion term: December 2020

    The procurement plan envisages a tender featuring four lots:

    Lot 1: reconstruction of Dniprovska PS’s Zaporizka 750 kV SS

    Lot 1: reconstruction of Dniprovska PS’s Dniprovska 750 kV SS

    Lot 3: reconstruction of Pivnichna PS’s Kharkivska 330 kV SS and Zaliutyne 330 kV SS, and

    Lot 4: delivery of transformer equipment for 330 kV and 750 kV SSs

    Presently, we are working on preparing the tender documentation for a tender on the selection of a transformer equipment supplier (Lot 4) and selection of contractors for reconstruction of the aforementioned four substations (Lots 1 to 3).

    The start of prequalification phase for the tender on the selection of contractors for reconstruction of the substations was announced on 22.12.2016. Ukrenergo NPC SE is waiting for prequalification applications to be submitted by the deadline of 20.02.2017. 

    The project’s key purpose is to enhance security, reliability and effectiveness of electricity transmission by reconstructing substations which have been in service for a long time and whose electrical equipment is mostly past its manufacturer-guaranteed rated service life and requires annual outlays on maintaining it and keeping it in an operable condition.

    This project is financed under the following agreements:

    – Agreement between the Cabinet of Ministers of Ukraine and the German Government on Financial Cooperation (2006 and 2007 allocations), signed on 30.12.2011, ratified on 02.10.2012 (Law of Ukraine No 5298-VI), and entering into force on 04.12.2012.

    – Loan Agreement between the Cabinet of Ministers of Ukraine and KfW and the Separate Agreement between Ukrenergo NPC SE and KfW, signed on 30.12.2011 and entering into force on 04.12.2012.

    Loan from the German Government: EUR 40.5 million (maturity date: 31.01.2017).

    Loan from KfW: EUR 25 million (canceled upon mutual agreement due to reduction of the scope of work under the Project).

    Loan amount used: EUR 3.625 million (advance payment to a contractor)

    Loan amount expected to be used in 2017: EUR 8 million.

    Based on international tenders held according to KfW Contracting Guidelines, a contract on modernization of two Dniprovska PS substations (Kirovska 330 kV SS and Dnipro-Donbas 330 kV SS) has been signed on 28.12.2015 within the Project’s framework.

    The contract has entered into force on 03.08.2016 (date of advance payment to the contractor). Contractor: the consortium of Alstom Grid GmbH, Germany and Chornomorenergospetsmontazh LLC, Ukraine. Contract value: EUR 18.1 million (w/o VAT).

    Annex 1 to the Contract, changing the foreign contractor’s name to GE Grid GmbH, was signed on 22.04.2016.

    In accordance with the contract, the contractor has prepared separate Contract Fulfilment Programs, Work Schedules, Quality Plans and Safety Plans for each substation, provides monthly reports on the work progress under the contract, has completed engineering (geological and geodesic) surveys and started design work.

    A Project Support Consultant (the consortium of MVV Decon and Consulectra, Germany; subcontractor: Teploelektroproect-Soyuz Kharkiv Design Institute LLC) was engaged under the Separate Agreement between Ukrenergo NPC SE and KfW.

    Consultant’s services are financed from grants provided by the Trust Fund of the European Neighborhood Instrument (the Financial Agreement between KfW and Ukrenergo NPC SE worth EUR 1.8 million was signed on 06.11.2012, controller of funds: KfW).

    On 03.12.2012, KfW has signed, on behalf of Ukrenergo NPC SE, the Project Consulting Service Agreement worth EUR 1.3 million.

    After reaching an agreement with KfW on changing the Project’s composition (featuring full reconstruction of Dniprovska PS’s two aforementioned substations), and in order to prepare the relevant feasibility studies and tender documentation, expansion of the scope of Project Support Consultant’s services was also agreed with KfW.

    On 03.02.2016, KfW has signed with the Consultant, on behalf of Ukrenergo NPC SE, the relevant Annex 1 to the Consulting Service Agreement.

    Value of additional services under the Annex 1: EUR 314 thousand.

    Updated value of the Agreement: EUR 1.6 million.

    Consultant’s fee paid: EUR 1.2 million.

    As part of the aforementioned additional scope of services, the Consultant is currently finalizing the feasibility study according to Ukrenergo NPC SE’s reservations provided on 05.01.2017.

    On 29.12.2016, the Consultant has delivered the first version of the draft tender documentation (commercial and technical parts in the English and Russian languages), developed in accordance with KfW’s procurement strategy.