Cabinet of Ministers updates thermal power plants’ reconstruction plan

The Cabinet of Ministers of Ukraine, in a June 18 order, extended the timeline for thermal power plants’ modernization, previously scheduled for 2004-2010, out to 2020. In addition, the Cabinet stipulated that expenses for modernization programs (bank loans, debt financing or direct investments) could be repaid through surcharges to electricity tariffs. Alexander Paraschiy: The Cabinet’s aim is to encourage financial institutions to finance generation companies’ CapEx programs. Though, to go into effect, the Cabinet’s decree needs to be supported by a new modernization program for 2008-2020 (to be approved by the NERC and the Ministry of Fuel and Energy) with a clear compensation scheme for investments. Approval of the program, which we expect is possible by fall 2008, would be a market catalyst for Ukrainian generation companies.