On November 9, 2024, NPC Ukrenergo announced a temporary suspension of payments on debt obligations under “green” sustainable development bonds issued in 2021 under a state guarantee. This decision was part of measures to restructure the debt within the framework of cooperation with the International Monetary Fund (IMF).
As the company explained, this decision is temporary and will be in effect until the debt restructuring is completed, which is planned in the coming months. At the same time, NPC Ukrenergo assures partners and creditors that the company continues to fulfill its current obligations aimed at ensuring Ukraine's energy stability, including preparations for the winter period and restoration of energy infrastructure.
Technical default: what does it mean?
According to the report, the suspension of payments is due to a “technical default” that arose due to regulatory restrictions stipulated by special laws and Cabinet resolutions. This step is part of the fulfillment of the conditions necessary to receive financial assistance from the IMF. Technical default does not mean a complete default of the company, but only a temporary suspension of payments, which should be canceled after the debt restructuring is completed.
One of the main reasons for the suspension of payments is cooperation with the International Monetary Fund. Ukraine must meet conditions that include measures on financial stability and restructuring of the public debt, including in the energy sector. This decision is also part of the government's broader strategy aimed at ensuring the country's economic stability in times of war.
Despite the temporary suspension of payments, NPC Ukrenergo assures that the decision will not affect the operational and financial stability of the company. It continues to fulfill its obligations, in particular in terms of preparing for the winter period, ensuring the protection of the power system and strengthening its resilience under martial law. After the debt restructuring is completed, the company intends to resume regular payments.
The debt restructuring process of NPC Ukrenergo is expected to be completed in the coming months, after which the company will resume fulfilling its financial obligations to investors. This decision is part of a broader policy of stabilizing Ukraine's economic situation in the context of war and cooperation with international financial institutions, such as the IMF.
