Centerenergo gains UAH 381 mln for Zmiyiv TPP reconstruction

The National Electricity Regulation Commission allocated UAH 380.8 mln to Centerenergo (CEEN UK) to rebuild its first power unit at the Zmiyiv thermal power plant (TPP), Interfax reported on Apr. 4. The funds to cover the reconstruction will come from a special mark-up to Centerenergo’s electricity tariffs and will most likely be spread over 4-5 years.

The project to reconstruct Zmiyiv-1, planned for 2013-14, is aimed at increasing the power unit’s capacity to 225 MW from 175 MW, increasing its lifespan by 20 years, as well as improving its fuel efficiency. Total reconstruction costs of the power unit, as approved, amount to UAH 476 mln, net of VAT. The measure, therefore, will cover 80% of reconstruction costs.

Alexander Paraschiy: The 80% cost compensation rate is impressive, particularly when compared to Centerenergo’s previous reconstruction project, Trypillia-2, which was awarded 63% compensation.

On the negative side, we see a risk that the Zmiyiv-1 project can be postponed, since a final decision on the recovery of its damaged Uglegorsk TPP (and its financing) hasn’t been made yet. Recall, the Uglegorsk TPP caught fire a week ago, with all its coal-fired power units being severely damaged. Currently, all the efforts of Centerenergo are concentrated on solving social and technical issues related to the Uglegorsk disaster.