Cabinet fires GarPok director allegedly for attempt to pay to all green energy producers

Ukraine’s Cabinet convened an extraordinary meeting on
Saturday, Nov. 13, to dismiss director of state company Guaranteed Buyer
(GarPok) Kostiantyn Petrykovets. According to Petrykovets, he was fired because
he had declined to “implement illegal instructions from government
representatives on payments to renewable energy producers.” GarPok has directed
UAH 19.3 bln, received from state company Ukrenergo (NPCUKR), to repay its
arrears to green power producers, Petrykovets commented. However, the payment
has been blocked by state-owned Oschadbank (OSCHAD), Petrykovets told a TV
Channel on Nov. 13. Oschadbank commented on Nov. 15 that all its payments are
processed in the regular way. According to Petrykovets’ comment of Nov. 15, as
of late Nov. 12, only UAH 5.6 bln out of UAH 19.3 bln were directed to green renewables,
and the distribution of funds was not proportional, Interfax-Ukraine reported.

According to zn.ua news site, Petrykovets became the
victim of a conflict between president Volodymyr Zelensky and the richest
Ukrainian, Rinat Akhmetov, who owns about ¼ of all renewable power producers in
the country. The government allegedly is trying avoid repaying GarPok’s debt to
Akhmetov’s companies. By law, GarPok cannot discriminate any green power
producer.

Recall, Ukrenergo issued “green” Eurobond in early November for USD 825 mln
(UAH 22.8 bln equivalent at the pricing date). The raised funds were planned to
be used to repay Ukrenergo’s debt to GarPok, which should direct all the funds
to repay its debt to renewable energy producers. In this way, the bond proceeds
would be used for financing renewable energy producers.

The Cabinet explained its decision to dismiss
Petrykovets due to a “lack of professionalism and causing losses to” GarPok and
the state for over UAH 500 mln, Interfax-Ukraine reported on Nov. 13 citing the
Cabinet’s press release. The losses were caused by selling electricity “at
deliberately low prices for the benefit of a certain financial and industrial
group.” Energy Minister Herman Haluschenko told a press briefing on Nov. 15
that all the money raised by Ukrenergo from the Eurobond placement would be
directed solely to green energy producers.

Alexander Paraschiy: The
Cabinet’s reasoning does not explain why it held the extraordinary meeting on
Saturday to dismiss Petrykovets. Such circumstances make us believe the
allegation made by Petrykovets is much closer to reality than the Cabinet’s.

According to local media, the conflict between
Akhmetov and Zelensky intensified with the adoption of the bill on oligarchs which will
affect Akhmetov. Akhmekov’s media started actively criticizing Zelensky over
the last month, which might be one of the reasons for the latter’s rating decline based on
recent polls (at least, he/his entourage can explain the decline by this). If
Zelensky indeed has decided to use the delay of GarPok payment to Akhmetov as a
tool for pressuring him, this does not look like a wise move. Most of the other
affected green producers are international investors, while among the buyers of
the recent “green” Eurobond there is EBRD. Discrimination against certain green
producers is not allowed. The status of Ukrenergo’s bond as “green” and
“sustainable” can be questioned with such government’s moves.

Most likely, in the coming hours/days, the issue will
be resolved, though the likelihood remains that DTEK Renewables (DTEREN) of
Akhmetov will be discriminated against.