Ukrainian green energy, which once demonstrated dynamic growth, is now facing a number of financial difficulties. Andrian Prokip, an expert from the Energy Program of the Ukrainian Institute for the Future, stressed the need to fulfill state obligations to investors in renewable energy. As he emphasized, it is important to ensure full settlement with producers and liquidate accumulated debts.
Back in 2020, a memorandum was signed between the government and renewable energy producers (REFs). The agreement provided for a voluntary reduction in feed-in tariffs to reduce the financial burden on the state. Producers agreed to receive less, but hoped for stable payments in the agreed amount.
According to Prokip, this agreement provided that part of the tariff — about 20% — would be financed by the budget. However, according to the expert, these funds were not included in the budget, and payments were transferred to NPC Ukrenergo. This resulted in significant debt to RES producers.
To reduce debt pressure, Ukrenergo issued green Eurobonds worth over $800 million. However, due to corporate governance problems and a persistent funding shortfall, the company declared technical default in October. According to Prokip, this is not the first time that Ukrenergo has been forced to borrow to pay producers, while debts to the company itself are only accumulating.
Another revision of the electricity transmission tariff is now on the agenda. The regulator proposes to reduce the reasonable tariff by 25%, although the legislation requires full coverage of Ukrenergo's costs. Such a reduction, according to experts, will further exacerbate the company's financial crisis.
For his part, Yuriy Boyko, an advisor to the Prime Minister of Ukraine and a member of the Supervisory Board of Ukrenergo, predicts an increase in debt for the current year by another 8 billion hryvnias. If the situation does not change, debts to renewable energy producers will only grow.
Renewable energy remains an important part of Ukraine's energy security. At the same time, the state's failure to fulfill its financial obligations threatens its further development. According to experts, Ukraine urgently needs to implement transparent and long-term financial mechanisms to support green energy and avoid default in the industry.
