Control over Ukrenergo was transferred to the Finance Ministry on Feb. 4 in a step towards transforming the national energy company into a private joint-stock company with European energy network standards.
Adopting the standards is a condition for the European Union to make a second 500-million-euro loan transfer to Ukraine.
“The task of the Finance Ministry is to accelerate the process of Ukrenergo’s corporatization,” the ministry said in a statement.
“This … will enable Ukrenergo to be certified as an independent electricity transmission operator and will allow to separate the control over processes of electricity generation and transmission.”
Control over Ukrenergo was transferred to the Finance Ministry from the Ministry of Energy and the Coal Industry. The government passed the transfer resolution on Dec. 18, 2018.
Ukrenergo is a state-owned enterprise that operates Ukraine’s national electricity grid. The Finance Ministry will transform Ukrenergo into a private joint-stock company so that it can then be integrated into the European energy market. In the meantime, it will be managed by its supervisory board.
“The company’s supervisory board will carry out strategic management and control over the activities of Ukrenergo,” the ministry statement read. “(The board) consists of three state representatives and four independent members who are experienced professionals and have significant international experience in transformation processes in the energy sector.”
The corporatization of Ukrenergo is required to certify the company according to the EU’s ENTSO-E energy network standards. Progress towards this goal is one of the requirements of the European Unions’ second macro-financial loan transfer to Ukraine, worth 500 million euros.
The first 500-million-euro loan transfer was completed on Dec. 11, 2018. The two transfers are part of EU’s fourth program of macro-financial assistance to Ukraine aimed at addressing the country’s “current external and financial vulnerabilities.”
