EBRD’s Consultant Presented Inception Report on Energoatom’s Corporatization Project
Deloitte, a company selected by the European Bank for Reconstruction and Development (EBRD) as a consultant for the NNEGC Energoatom (Company), presented the inception report on implementation of the Company’s corporatization project whereat it had highlighted the main steps of the project implementation.
During the presentation, President of Energoatom Yuriy Nedashkovskyi emphasized the importance of the project and prospects for the Company to be opened by corporatization. ‘Changes are long simmering. Energoatom may function as a unitary enterprise, though it is corporatization that launches many new opportunities for us. In the meantime, the corporatization process is now overlapped with legislative changes related to the establishment of the supervisory boards. Reconciliation of these processes requires strenuous joint efforts. And today we have a good opportunity to make a serious step towards this goal,’ President of Energoatom said.
Consultants have been working for two months to develop the draft inception report. Project implementation provides for 39 major tasks to be fulfilled in three stages. The Consultant shall work in close cooperation with all stakeholders including, in particular, the Cabinet of Ministers of Ukraine (CMU), the State Nuclear Regulatory Inspectorate of Ukraine (SNRIU), Lenders and the International Atomic Energy Agency (IAEA).
Stage 1 includes review and assessment of the applicable legislative framework in Ukraine. One of the key issues at this stage is implementation of CMU’s Decrees # 142 and #143 related to new requirements to management of state owned unitary enterprises, of Order #248 of the Ministry of Energy and Coal Industry of Ukraine that provides for drafting a new revision of the charter of Energoatom in compliance with the Loan Agreement between Energoatom and the EBRD. Stage 2 envisages drafting of the Roadmap to corporatization of Energoatom, reviewing and designing of effective organizational and management corporate structure, determining and summerizing of the rights and obligations of the Company resulting from corporatization, determination of the role of the state, etc. Stage 3 provides for finalization of the corporate governance issues, including roles and responsibilities of the board of directors, their approvals and authorizations, development of the financial control scheme, and accountability of the Company’s management taking into account best practices and international standards. Besides, on the final stage there will be drafted a ten-year corporate plan for Energoatom related to the financial management, long-term capital raising and cash flow management .
Background information. On March 25, 2013 a Guarantee Agreement between Ukraine and the European Bank for Reconstruction and Development and a Loan Agreement between the EBRD and Energoatom on Complex (Consolidated) Safety Upgrade Program for nuclear power plants (CCSUP) were signed. According to the Agreement, the EBRD makes a loan to the NNEGC “Energoatom” in the amount of Euro 300 million for implementation of measures in the framework of CCSUP. The loan is made under the state guarantees. One of the covenants of the Loan Agreement is corporatization of Energoatom in compliance with the Roadmap developed by the Corporatization Consultant in compliance with best international practices.