Kyivenergo To Continue Leasing Kyiv City Assets Through 2017

The decisionby the Kyiv City Council yesterday was supported by 65 out of 120 members of the council. According to the decision, Kyivenergo (KIEN: HOLD) will pay 10% of its net income (but not less than UAH 2 mln or USD 0.4 mln p.a.) as a lease payment. Kyivenergo’s old lease agreement with the city of Kyiv terminates on May 1, 2007. Alexander Paraschiy:  As we speculated in our April 2, 2007 report, a new tender to lease the city’s assets did not occur and Kyivenergo goes on leasing the assets with a low lease payment. Notably, the decision was lobbied for by Kyiv’s mayor, who was previously the main initiator of stopping Kyivenergo’s lease. It looks like the World Bank (the WB has a loan agreement with Kyivenergo till 2017) and lobbying of Kyivenergoholding’s founders were the two main factors that made the mayor change his attitude about Kyivenergo.