Ukraine: privatisation of power distribution companies postponed

Ukraine

Igor Bilous, the Chairman of the State Property Fund of Ukraine (the "Fund"), has recently announced in a press conference that the Fund has decided to reschedule the privatisation of the following six regional power distribution companies (the “PDCs”) until early 2017:

  • Ternopiloblenergo;
  • Khmelnytskoblenergo;
  • Kharkivoblenergo;
  • Mykolayivoblenergo;
  • Zaporizhiaoblenergo; and
  • Cherkasyoblenergo.

The privatisation of the PDCs has been anticipated for a long time, and according to Mr. Bilous the preparation for the PDCs’ privatisation has been completed. However, Mr. Bilous explained that the Fund’s decision is driven by the necessity to first adopt the law on the new modern and more efficient electricity market in Ukraine and approve the rate(s) of the incentive RAB (regulatory asset-based) tariff. This should attract more investment to the energy sector in Ukraine, and may also potentially attract more bidders for the privatisation of the PDCs.