It seems the 'renewable energy' sector in Ukraine is facing further hurdles as the Zelensky government looks to reduce feed-in tariffs that sustain the sector in-country. This pending development has riled lobbying groups inside and out of Ukraine, as their renewable energy cash cow comes under fire.
The rub seems to be the industry was promised these subsidies years ago and invested accordingly. Now Zelensky's ministers want to reduce the money paid.
“We hope that the Government will avoid a unilateral imposition of severe tariff cuts that could be detrimental to the viability of renewables projects and create lasting damage to Ukraine’s fledging FDI environment. The American Chamber of Commerce in Ukraine calls the Government to support the latest investors’ proposals on voluntary restructuring terms while reaching an agreement aimed at resolving the renewables crisis,” commented Andy Hunder, President of the American Chamber of Commerce in Ukraine.
The U.S.-Ukraine Business Council looks forward to the prompt finalization of the negotiations between Ukraine authorities and the RES business community with the signing of a mutually beneficial Memorandum of Understanding which takes into consideration the current energy sector concerns and the longer-term imperative for Ukraine to attract further investments into its energy sector and to strengthen its energy independence, wrote USUBC.org.
The industry now is targeting funds received from the International Monetary Fund this week in Ukraine in order to continue the subsidies.
Ukraine is expecting to get $1.9 billion from the IMF this week (Friday). Since they have paid electricity producers (i.e. green energy companies) only 10% of payments for their production during March and April, Ukraine needs to prioritise at least part of the IMF tranche to pay energy producers. Otherwise it looks like extortion of the industry to force them to accept deep cuts in the green tariff, writes OpenForBusiness.ua, a Ukrainian business-oriented publication.
Subscribe to our evening newsletter to stay informed during these challenging times!!