Cabinet approves a USD 57 mln rebuild for Donbasenergo unit

Ukraine’s Cabinet of Ministers approved a plan to reconstruct Donbasenergo’s (DOEN UK) #13 power unit at the Starobeshev Power Plant. The plan foresees the replacement of key equipment (turbine and filters) worth UAH 279 mln (USD 35 mln); the total reconstruction cost was set at UAH 460 mln (USD 57 mln) over two years. As a result of the upgrade, power capacity of the unit will increase from 200 MW to 210 MW.

Alexander Paraschiy: The key positive implication from the government’s approval is that Donbasenergo becomes eligible to receive compensation for up to 80% of costs related to financing reconstruction of the power unit. The compensation should be granted via an additional surcharge to Donbasenergo’s power tariff, i.e. at the cost of power consumers, and could lead to an increase in annual EBITDA by up to USD 10 mln over the next five-seven years.