Ukraine privatizes small hydro power plant for UAH 53 mln

Ukraine’s State Property Fund (SPF) reported on Nov. 23 it sold the assets of Myhiyivska Hydro Power Plant for UAH 52.5 mln (USD 2.0 mln), which exceeded its starting price by 4.8x. Out of 16 competitors, the winning bid was offered by EMZA LLC, a local Ukrainian operator of small HPPs, according to the SPF. Another two small hydro power stations will be offered for sale by the end of next week.

Myhiyivska HPP, founded in 1958, is located in the Mykolayiv region of southern Ukraine. Its turbines have a designed capacity of 1.18 MW, but there is no public information about its ability to produce power.

Alexander Paraschiy: Proceeds from sale of Myhiyivska HPP amount to just 0.3% of Ukraine’s privatization plan for 2016, but it’s a really big deal considering the recent experience of privatization. In particular, this sale amounts to 11% and 35% of Ukraine’s total privatization proceeds in 2014 and 2015, respectively. This is also equal to 74% of 9M16 privatization proceeds.

Some small HPPs may enjoy special “green rates” in Ukraine, which makes such projects attractive for a wide range of investors. Therefore, there could be high demand for other small HPPs that the SPF is offering, which will enable Ukraine to boost its privatization proceeds this year, as compared to the lean results of 2015.  However, by selling only small assets, Ukraine won’t be able to fulfill annual privatization plans, which usually exceed UAH 17,000 mln.