DTEK accumulates UAH 1.6 bln payables to state companies, media report

The total debt of DTEK Energy to state-controlled natural
gas suppliers and electricity grid operators has reached UAH 1.6 bln as of
March, the nashigroshi.org news site reported on Mar. 23, citing their data.
Out of this amount, UAH 948 mln is debt for natural gas that was consumed by
its Luhanska Power Plant. Recall, since August 2019, the plant has been unable
to receive any coal and it had to shift its power unit to burning natural gas.

Responding to the report, DTEK commented that state
company Energorynok (the former operator of the electricity wholesale market)
owes DTEK-Skhidenergo (the nominal owner of the Luhanska plant) UAH 1.9 bln for
supplied electricity. Energorynok’s total debt due to DTEK Energy was UAH 7 bln
as of end-June 2019, according to DTEK Energy’s semi-annual report.

Alexander Paraschiy: It seems
like DTEK is trying to employ a tried-and-true tactic in its relations with
state companies, which had proven effective with Kyivenergo in 2011-2012.
In that case, DTEK did not pay for natural gas consumed by its related
subsidiary Kyivenergo in order to raise its gas payables to the amount of
Kyivenergo’s losses from inefficient prices for heat (set by Kyiv city). In a
normal situation, the city would not be ready to pay the compensation for
losses. But faced with the risk of failing to provide heat supply to the entire
capital city (from a cut in gas supply to Kyivenergo), the city had no choice
but to pay.

These days, the accumulated payables of DTEK-Skhidenergo
for gas (and the risk of a gas cut) should stimulate the government to consider
the unresolved problem of large Energorynok payables to DTEK-Skhidenergo and
the entire DTEK Energy holding. If so, DTEK will enjoy a significant release of
its working capital.