Energy sector recovery program to be launched shortly - Ukrainian Energy Ministry

MOSCOW. Aug 23 (Interfax) -The Ukrainian government will soon launch a 5%-7%-9% concessional lending program to restore damaged facilities of the country's energy infrastructure, Energy Minister German Galushchenko said.

"The mechanism has been developed now. So, all enterprises ought to speed up and take stock of what has already been down and what else needs to be done. Many of them have already held negotiations with banks. That is, they have an understanding what banks they can go to. We will now launch this process," Ukrainian media quoted Galushchenko as telling journalists on Tuesday.

When enterprises reach agreements with banks on loans, a decision will be adopted on compensation of the loan rate, which will determine the amount of funds to be allocated to reduce the rate on this or that loan, the minister said.

There is a list of enterprises, among them several heat and power plants, that have applied for participation in this program, he said.

As reported, the Ukrainian government allocated 350 million hryvni on August 21, 2023 for the Energy Ministry to support energy companies. According to Prime Minister Denis Shmygal, this money will help reduce the cost of loans that these companies are using to finance repairs of damaged equipment and preparations for the upcoming heating season.

First Deputy Energy Ministry Yury Vlasenko said in early August that the total amount of financing under the 5%-7%-9% program to restore thermal power plants and heat and power plants stood at 7.6 billion hryvni. Vlasenko also spoke about the need to introduce certain changes into the program to enable thermal power plants and heat and power plants to receive such loans.

Head of the Ukrainian parliament's Committee on Finance, Tax and Customs Policy Daniil Getmantsev said in an interview with Ukrainian media later that as part of the 5%-7%-9% program, as an exception, banks plan to issue loans worth eight billion hryvni to the energy sector, the amount which he said "is incomparable with the total volume of the program."

Data available on the Finance Ministry's website shows that since the launch of the government's Affordable Loans at 5%-7%-9% program in February 2020, businesses have received 70,000 loans totaling 225.4 billion hryvni. Entrepreneurs have received 17,200 loans worth 58.3 billion hryvni since the beginning of 2023.

DTEK Energo general director Ildar Saleyev said in an interview with Ukrainian media in mid-July that the company had submitted applications to state-owned banks and expected to receive around five billion hryvni under this program. Hopefully, all procedures would be finalized and the first resources would become available in July, he said.

Plans to receive funds under this program to prepare for the 2023-2024 heating season were later announced by then PJSC Centrenergo CEO Viktor Spichka.

Oschadbank Deputy CEO Yury Katsion said on July 6 that the bank had already received up to five applications from large energy generating companies for loans under the 5%-7%-9% recovery program. However, in order to launch this program, certain changes need to be made to the budget that would enable the Entrepreneurship Development Fund, which handles loan rate compensation for businesses, to do the same in relation to major power generating enterprises.