Ukrenergo, the state electricity grid operator, owes a whopping 950 million USD to renewable energy producers. But the European Bank for Reconstruction and Development (EBRD) will back help Ukrenergo overcome that debt.
Green energy has been a more-than-usual controversial topic in Ukraine, where the state promised companies investing in green energy, that the state company Ukrenergo would purchase the produced electricity. However, many of the producers have not been paid, putting a solid dampener on green energy investments in Ukraine in general.
But now, Ukrenergo has placed 825 million USD green bonds, trying to resolve the problem which has led to a regular criss in the green energy sector. The European Bank for Reconstruction and Development (EBRD) will back these bonds by investing 75 million USD in them, the Kyiv Post reports.
The problems between the state and the energy producers date back to 2019. Originally, in 2008, new tariffs were introduced in an attempt to make 25 percent of the Ukrainian energy consumption come from renewable sources like wind and solar energy. The state was supposed to buy all the energy produced.
However, it attracted too many investments in 2018 and 2019 for the government to pay back the producers. Following that, the government lowered the tariffs in a deal with some companies in exchange for them paying back their debt. Many companies refused this new line and went for international arbitration instead.
The problem with lowering the tariffs is not only that the energy companies earn a little less for every watt produced. The state has only guaranteed buying the energy for nine years, meaning that the producers have nine years to earn back their investments. With lower tariffs, some of these companies will lose money on their investments.