Ukraine privatizes second hydro power plant for UAH 62 mln

Ukraine’s State Property Fund (SPF) reported on Nov. 24 it sold the assets of Kostiantynivska Hydro Power Plant for UAH 64 mln (USD 2.5 mln), which exceeded its starting price by 4.6x. Out of 16 competitors, the winning bid was offered by Altgen, a Ukrainian company. Kostiantynivska HPP is located in the Mykolayiv region of southern Ukraine and has installed power generation capacity of 0.81 MW. A day before, the SPF sold another small HPP, Myhiyivska, for UAH 52.5 mln.

Alexander Paraschiy: With the sale of these small assets, the Ukrainian government raised total proceeds from privatization in 2016 by more than 2.5x to about UAH 190 mln. That already exceeds the result for 2015 (only UAH 152 mln in privatization proceeds generated), but is still below the annual plan of UAH 17,100 mln. In the SPF’s plan for the rest of 2016, there is a tender for a 99.6% stake in nitrogen fertilizer producer Odesa Portside Plant (at a starting price of UAH 5,160 mln) and tenders for other assets with total starting price of about UAH 500 mln. Thus far, we do not believe the Odesa Portside tender will be successful, and Ukraine’s total privatization proceeds won’t exceed UAH 600 mln in 2016. We still believe Ukraine will be able to initiate a large privatization next year, trying to sell power GenCo Centrenergo, a set of power distribution companies, and some power engineering companies.