Government Assists Energy Companies In Building Fuel Reserves

The government issued Decree 415, which outlines how generation companies will receive compensation for interest payments made on loans for fuel reserves. The interest payment compensation will equal the National Bank of Ukraine?s current discount rate of 9%. Concorde Capital:According to the previous 2005-budget, electricity generation companies were able to take out loans for fuel reserves directly from the budget. However, the conditions of the loans were not stipulated. According to the new 2005-budget, energy companies must obtain loans from commercial banks. The 9% interest payment will then be compensated by the budget. The latest compensation scheme looks more transparent for energy companies, and less harmful for the state budget. This is Neutral for our company valuations.