Zakhidenergo has USD 0.2 bln reconstruction program approved
26 June 2012
Ukraine’s Cabinet of Ministers approved the reconstruction plan for two power units of Zakhidenergo (ZAEN UK) of UAH 1,562 mln (USD 195 mln), which includes the reconstruction of the #10 power unit at Burshtyn TPP and #7 unit at Dobrotvir TPP.
Alexander Paraschiy: The approval of the investment program is the last step for Zakhidenergo to receive partial compensation for CapEx costs via a special tariff mark-up, which will have a direct positive impact on its P&L. Earlier this year, the government approved a USD 220 mln reconstruction program for Zakhidenergo’s other two power units and the company has been granted compensation of USD 116 mln for that program, which it will receive over 2012-2016. Given the compensation rate for these newly approved projects would remain the same, Zakhidenergo is likely to get extra USD 103 mln over the next 5-6 years from tariff mark-up, which will be translated into additional annualized income for the company of about USD 18 mln.
