Kyiv to Compensate USD 17.4 mln of Kyivenergo’s Heat Production Losses

According to the Kyiv City council’s decision, USD 18.3 mln will be directed from the city budget to compensate heat production losses for Kyivenergo (KIEN: HOLD) and Darnytsia CHPP. About USD 17.4 mln of this amount will be directed to Kyivenergo. Earlier this month Kyiv City allocated USD 6.7 mln to compensate for Kyivenergo’s losses. Alexander Paraschiy: We estimate Kyivenergo’s losses from heat production for FY 2007 at USD 121 mln. The total compensation from Kyiv city at the moment is USD 76 mln, or 63%. This is below our expectations of a 75% compensation rate. We believe Kyivenergo will ask for full compensation through courts, and we expect that in the year 2008 its losses from heat production will be fully compensated.