Zelensky “likes” idea of privatizing Centrenergo with inefficient coal mines

President Volodymyr Zelensky considered as
“great”  the idea of offering up for privatization the power
generation company Centrenergo (CEEN UK) together with loss-making mines,
Interfax-Ukraine reported on Feb. 25. He made the comment at a council of Ukrainian
coal miners where the problems of the industry were discussed. All the
currently operational state-controlled coal mines are cost-inefficient and
therefore loss-making.

As another possible solution to the industry’s
inefficiency, Zelensky publicly offered the head of private energy holding DTEK
(DTEKUA, DTEREN) Maxim Timchenko to privatize the coal mines. Responding to
Timchenko’s objection that such an acquisition may be blocked by the
Anti-Monopoly Committee, Zelenky joked “I will talk to them and they will be in
favor,” according to Interfax-Ukraine. Later on, Timchenko told journalists
that DTEK has no plans to acquire either Centrenergo or any state-controlled
mine. In 2019, DTEK accounted for 90% of Ukrainian steam coal production.

Centrenergo is among the companies that the government
has been considering privatizing over the last decade. Ukraine was close to
selling Centrenergo in late 2018, when it offered its 78.3% stake for a
starting price of about USD 215 mln. In December 2018, the government cancelled the privatization tender
as two potential bidders for the stake had doubtful reputations.

Alexander Paraschiy: There is definitely nothing great in the idea to sell Centrenergo together
with inefficient mines, and we hope that somebody in the government will
explain it to the president. Nor do Zelensky’s comments about the Anti-Monopoly
Committee, which he is ready to force to breach the legislation, sound great.
All in all, Zelensky’s comments about the ways to resolve the problem of
inefficient state coal mining sector look amateurish, but they reflect the
great problem existing in the sector for over two decades, with no
professionals having been able to resolve it.