Training in Ukraine incentive tariff increases the interest in power companies – the expert of the National Institute for strategic studies

The statement of the head of the National Commission, carrying out state regulation in spheres of power and utilities (NKREKU), the end of the preparation of the regulatory framework for the introduction of the incentive tariff setting (RAB-regulation) can help to raise the price of state shares in power companies put up for privatization.

About this in his article on the portal ”Hvilya” writes the expert of the National Institute for strategic studies Alex Poltorak.

«The introduction of RAB-regulation envisaged in the Association Agreement of Ukraine with the EU as regards the implementation of Directive 2009/72/EC. But in the context of privatization, the value of the RAB is that significantly increases the commercial interest in the Ukrainian power», – he said.

Stimulating tariff or RAB-regulation (Regulatory Asset Base – adjustable base of assets) – the system of long-term tariff for investment in the development and modernization of electric networks. The author emphasizes that potential buyers of state-owned shares in Ukrainian power companies are familiar with such options of doing business in the field of electricity supply.

«It is also important that the business model for electric networks understandable to the Western investor. Since the mid 1990-ies to RAB-regulation have moved most of Western Europe, Canada, USA, Australia. The European Union in 2002 ordered the countries of Eastern Europe to apply RAB in the establishment of tariffs for monopolies, and to RAB-regulation has passed Czech Republic, Slovakia, Hungary, Poland, Romania, Bulgaria and several other States» – lists the expert.

Poltorak stressed that the results of privatization depends on the allocation of Ukraine the next IMF tranche before end of the year, the country expects to receive $4.5 billion of international financial assistance.

«Under the Cabinet of Ministers created a special working group with participation of Western experts, which includes Your Jerome (the IMF representative in Ukraine), Francis Malige (managing Director of the EBRD in the countries of Eastern Europe and the Caucasus), Sevki acuner (EBRD Director in Ukraine), representatives of USAID, US embassies and the EU in Ukraine. Their task is to develop a procedure for the sale of shares, so that no one Ukrainian or foreign investor does not have any comments on the transparency of the competition,” said the author.

The price of the auctioned state property Fund (SPF) of shares of power companies are now inflated two times compared to the real market value, said Facebook Director of energy programs of the Center for world economy and international relations of the National Academy of Sciences of Ukraine Valentin Zemlyansky.

«According to Bloomberg, shares «Donetskoblenergo» was quoted at a price of 5.9 UAH per share, and in 2016 – all 4,05 UAH. The starting price of the state property Fund – UAH of 8.78 per share. That is the shares will cost twice the price. The situation is similar with «Dneproblenergo», – wrote Zemlyansky.

About the beginning of the auctions on sale of packages of energy companies of state property Fund announced on July 24 on its official website. Put up for sale 25% of actions «Odessaoblenergo», «Donetskoblenergo», «Donbassenergo», «Sumyoblenergo», «DTEK Dniproenergo», «DTEK Dneprooblenergo», «DTEK Zakhidenergo», «Kyivenergo» .

The auction was scheduled for the period from 15 th to August 18. On 16 August, the SPF sold a blocking stake in PJSC «DTEK Donetskoblenergo» in the amount of 25% at a starting price of 143,8 million. For the purchase of shares claimed by only one participant bidding at the stock exchange «inneks», steps to increase the price was not. The buyer of a blocking stake in «DTEK Donetskoblenergo» was made by a member of the group Rinat Akhmetov’s SCM company Ornex, according to a press release from the group.

Training in Ukraine incentive tariff increases the interest in power companies – the expert of the National Institute for strategic studies 16.08.2017

Август 16th, 2017 by
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