Cabinet approves Centrenergo recovery project

With an October 9 resolution, Ukraine’s Cabinet of Ministers approved a UAH 124.9 mln reconstruction project of the workshop building of the Uglegorsk Thermal Power Plant (TPP) belonging to Centrenergo (CEEN UK) that was damaged by fire on March 29. The document stipulates that the reconstruction work is scheduled to be completed in 2013. The document approved the allocation of UAH 118.5 mln from a special fund of the state budget, while the rest is to be financed by Centrenergo. In June 2013, the government ordered the allocation of UAH 128.3 mln from the state budget to finance primary reconstruction work at the power station.

Alexander Paraschiy: The published document does not imply Centrenergo will receive additional financing for the Uglegorsk TPP reconstruction: it’s only a formal approval of the documentation for the costs that are being spent for the reconstruction, in line with earlier granted funds, we believe. At the moment, it is not clear why the total government spending for the project (UAH 118.5 mln) is below the initially approved volume (UAH 128.3 mln): either the government failed to allocate the funds in full, or the reconstruction project appeared to be cheaper than initially estimated. All in all, the news looks neutral for Centrenergo.