A new expert analysis concluded that Ukraine lost about Hr 40 billion ($1.4 billion) due to the controversial Rotterdam+ formula, the Anticorruption Action Center reported on Oct. 2.
According to the watchdog, this analysis came up during an appellate hearing at the High Anti-Corruption Court.
The appeal was lodged by former deputy prosecutor Viktor Chumak. He was trying to reverse the Special Anticorruption Prosecutor’s Office’s (SAPO) decision to close the Rotterdam+ case. Chumak lost his appeal late last month.
“An examination conducted by an independent expert… confirmed the overestimation of actual electricity costs in the amount of Hr 39 billion,” stated Chumak’s lawyer, Oleksiy Boyko.
The National Anti-Corruption Bureau (NABU) ordered the analysis while investigating the Rotterdam+ case before SAPO shut it down in August.
Rotterdam+ was the name of the formula that Ukraine’s energy regulator used to set electricity prices from May 2016 through June 2019.
About a third of Ukraine’s electricity had been produced from coal. When the coal-rich Donbas became a conflict zone, energy companies said Ukraine might face coal shortages and will need to import it.
The city of Rotterdam in the Netherlands is a major coal hub. Ukraine’s energy regulator set energy prices based on a Rotterdam price benchmark “plus” the cost of its delivery to Ukraine.
No coal was actually imported from Rotterdam but Ukrainians still had to pay for this fictional delivery. In total, this cost them about Hr 39 billion by the time the formula was retired in July 2019.
NABU investigated and found evidence that coal energy giant DTEK colluded with the regulator to make sure the Rotterdam+ formula was adopted. This way, the company could make huge sums of money and reverse the losses it suffered when Russia invaded Ukraine.
DTEK denied any collusion or wrongdoing, saying that it merely participated in legitimate industry working groups and was doing its best to help Ukraine try to solve an energy crisis.
In order for NABU to go to court, it had to produce expert witnesses who could confirm the amount that Ukrainians lost. However, the government stonewalled the bureau from being able to get this expert analysis.
NABU got one expert bureau to confirm that energy consumers overpaid Hr 18 billion in 2016 and 2017. The State Security Bureau initially confirmed these figures but later changed its mind.
In August, SAPO partly closed the case, saying that the amount of losses could not be determined.
