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Energoatom to meet electricity needs of Ukrainian railways

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30.09.2021

Today, September 30, 2021, in pursuance of the ordinance of the Cabinet of Ministers of Ukraine № 499 of June 5, 2019, the auction of SE NNEGC «Energoatom» in the form of a special session on lot packages sales under bilateral agreements was held.

Following the results of the auction, SS «Energoatom-Trading» sold 4.9 million MWh of baseload to TOV «Energo Zbut Trans» to be supplied in the period from October 1, 2021 to December 31, 2022. The cost of sold electricity exceeded UAH 5.45 billion.

The auction was held in accordance with the Procedure for electronic electricity auctions under bilateral agreements, approved by the above-mentioned ordinance of the Cabinet of Ministers. The conditions for holding a special session on lot packages sales are set out in Government Resolutions № 791 of July 28, 2021 and № 983 of September 22, 2021.

In particular, it is envisaged that the state-operated power producers may serve as sellers at a special session on lot packages sales, while legal entities with 100% state-owned equity licensed to carry passengers, i.e. JSC «Ukrainian Railways» or corporate affiliates, may be buyers.

The pricing mechanism is explicitly regulated by this Procedure as well.

Crucially, electricity purchased at special sessions on lot packages sales under bilateral agreements is intended only for company use of Ukrainian Railways and cannot be resold to third parties.

In pursuance of the decision of the National Security and Defense Council of Ukraine, on September 15, 2021 the government adopted a resolution on the establishment of the Anti-Crisis Headquarters to restore the sustainable operation of JSC «Ukrainian Railways».

Purchasing electricity directly from producers at reasonable prices is one of the most important measures to stabilize the financial condition of Ukrzaliznytsia. This will contribute to the protection of critical infrastructure and the reliable operation of the system for the carriage of passengers and goods by rail. Furthermore, a long-term contract for the purchase of electricity from the largest state-run producer is a guarantee of maintaining tariffs for socially important domestic and suburban passenger traffic and will have a positive impact on the development of Ukraine's economy.