Yesterday, the order of Cabinet of Ministers of Ukraine regarding the transfer of the integral property complex of Ukrenergo to the scope of management of the Ministry of Finance was published on its official website. The respective decision was taken on November 14, 2018.
Ukrenergo welcomes the decision of the Cabinet of Ministers of Ukraine on the transfer of functions of the authorized management body of Ukrenergo from the Ministry of Energy and Coal Industry of Ukraine to the Ministry of Finance of Ukraine.
The peculiarity of Ukrenergo’s unbundling is that according to Paragraph 1 of Section 4 of Article 32 of the Law of Ukraine “On the Electricity Market”, in order for a TSO to be independent, any natural or legal body shall have no right to directly or indirectly exercise sole or joint control over an economic entity that carries out activities related to the generation and/or supply of electric energy simultaneously. This principle is enshrined in the Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity, which Ukraine has implemented into its legislation while fulfilling its international obligations before the Energy Community. The principle guarantees the absence of discrimination of market participants in their access to power grids. Since Energoatom, being the largest electricity producer in Ukraine, is already accountable to the Ministry of Energy and Coal Industry of Ukraine, the managerial powers over Ukrenergo shall be transferred to another state body.
TSO`s accountability to a Ministry of Finance is widely practiced in Europe, with the power system of which we shall integrate the Ukrainian system in the coming years. Such an approach guarantees the monitoring of company’s financial position and, at the same time, the absence of political pressure onto and interference with its operation, which in turn will contribute to the growth of investor confidence both in enterprise and in the industry as a whole.
Pointing out, the Cabinet of Ministers approved the transformation of Ukrenergo from a state-owned enterprise into a private shareholder with a 100% state share company in November 2017. In October 2018 the Supervisory Board of the company was established and has since that time been in operation.
The transfer of the Ukrenergo property complex to the scope of management of the Ministry of Finance is an important step towards Ukrenergo’s certification. As noted by Vsevolod Kovalchuk, CEO of the enterprise, Ukrenergo’s unbundling ensures the realization of principles of transparent competition in the electricity market and is a prerequisite for the certification of Ukrenergo as a transmission system operator.
Putting in remembrance, the Association Council between Ukraine and the EU welcomed the appointment of the Supervisory Board of Ukrenergo at a meeting in Brussels on December 17, 2018. At the same time, it expects further steps to be taken in the following months to successfully complete the corporatization and certification of Ukrenergo and stresses the urgent need to complete the unbundling process in the Ukrainian electricity sector in concordance with the EU legislation.