Ukrenergo to issue 2.5 bln hryvni loan to fund creation of strategic coal reserves

MOSCOW. July 29 (Interfax) - The Ukrainian government has instructed the Ukrenergo national energy company of Ukraine to finance the creation of strategic coal reserves to get through the 2022/2023 heating season by issuing an interest-free loan of 2.5 billion hryvni to the Ukrvuhillia coal company until June 1, 2023.

"The Ukrenergo national energy company will have to grant an interest-free loan of 2.5 billion hryvni to the Ukrvuhillia state enterprise to buy coal at the market price. Ukrvuhillia, in turn, will have to purchase fuel, preferably domestically produced coal, and to put it into storage," the Ukrainian media said, citing the company's website.

This decision was adopted by the Ukrainian government.

Ukrvuhillia is to repay the loan to Ukrenergo no later than June 1, 2023.

"During the 2022/2023 heating season, coal will be used for power generation in coordination with the Energy Ministry. The approved electricity balance for 2022 and 2023 and coal accumulation schedules will have to be taken into consideration as well," Ukrenergo said when clarifying the principle of this mechanism.

A source of financing will be chosen by the National Nuclear Regulatory Inspectorate of Ukraine, and preference during these purchases will be given to domestically produced coal, Ukrenergo CEO Volodymyr Kudritskiy said.