NERC affirms 3 GenCos’ investment provisions

Yesterday the National Electricity Regulatory Commission said that it confirmed the investment provision for Dniproenergo (DNEN), Zakhidenergo (ZAEN) and Vostokenergo – the amount of money each power generator is allowed to earn and direct into investments from its tariffs for particular projects. The amounts are: Dniproenergo – UAH 188.8 mln, Zakhidenergo – UAH 131.7 mln, and Vostokenergo – UAH 728.6 mln. Yegor Samusenko: The investment provision allows GenCos to compensate for up to 80% of their modernization costs. For state GenCos, the approved investments are one of the most significant in recent years. The investment provisions directly increase the asset value of GenCos by corresponding amounts, In terms of the immediate effect on upside, the implication of the investment provisions is less significant. We estimate the implied incremental upsides for Dniproenergo at ~3% and for Zakhidenergo at ~1%.