Are there not enough funds to repair critical infrastructure damaged by Russian missile attacks? As the state audit found, NEC Ukrenergo, due to a number of violations, lost 1.13 billion hryvnia, which, it seems, “settled” in Kolomoisky’s company and cannot be used to restore the Ukrainian energy grid.
The heating season is approaching, and with it an increase in electricity use. The pages of newspapers and social networks are full of headlines about a difficult winter, planned power outages and a doubling of electricity prices.
At the same time, as a state audit discovered, Ukrenergo caused damage to the state in the amount of more than UAH 1 billion.
Damage to power plants, substations, transformers and power lines caused a total of $11 billion in damage to Ukraine, which is a colossal amount for our country.
Let us recall that from October to November last year, Russian missiles carried out 300 strikes on the Ukrainian energy system. And already during this year, massive missile strikes have disabled 271 energy facilities in Ukraine.
Accordingly, the capacity of Ukraine's energy system decreased by 68%.
And naturally, during the spring and summer months, significant attention and funds should be directed to eliminating the consequences of destruction and restoring the energy system.
But is this really true?
At the end of July, Prime Minister of Ukraine Denis Shmigal announced that the restoration of energy capacity was going according to plan and 60% of the planned work had already been completed.
However, not everyone shares such optimistic sentiments. After all, on August 5, at a meeting of the energy committee in the Verkhovna Rada, Konstantin Ushchapovsky, chairman of the National Commission that carries out state regulation in the energy sector, said that only 1.6% of emergency restoration work has been completed out of total damage. And Ukrenergo reports a not at all optimistic 7%.
How did it happen that over the entire period of time, emergency restoration work was completed for only 482 million UAH, when the damage caused reaches 29.9 billion UAH? Why have Ukrenergo completed repair work for only UAH 681 million, when losses amount to UAH 9.6 billion?
And the very first thing you might think in such a situation is the lack of funds for repair work. No, as it turns out, there are funds, but they are not used for their intended purpose, and Ukrenergo is mired in corruption scandals within the company and litigation.
Where does the funding, which is so urgently needed to restore the energy capacity of the state's strategic facility, actually go?
Since 2018, United Energy has enriched itself by UAH 1.4 million with funds from the state-owned Ukrenergo. What kind of company is this that was allowed to rob the state during the war? And here’s a surprise: United Energy is closely connected with Igor Kolomoisky, because it supplies electricity to the enterprise that he owns, and this electricity is necessary for the operation of two large ferroalloy plants.
Namely, according to sources in the energy market, United Energy sold the resource to another semi-state company, Ukrnafta. The controlling stake in Ukrnafta belongs to the state, but more than 42% of the shares are controlled by structures whose ultimate beneficiary is, among other things, Igor Kolomoisky.
By the way, NEURC fined United Energy LLC UAH 1.7 million for violating licensing conditions.
Moreover, in the period from February to April 2022, Ukrenergo sold off-balance electricity to United Energy for almost 1.92 billion hryvnia, but United Energy was unable to pay the entire amount, owing more than 1.13 billion hryvnia.
According to market rules, in this case the debtor company should be assigned the status “Pre-default” and “Default”. That is, Ukrenergo, based on the current legislation, on October 2, 2022 should have informed Oschadbank about the outstanding debt of United Energy. But on March 9 and March 11, Ukrenergo informed the bank that there was no such debt.
And it would seem like a few days - what does this give?
However, these days are becoming decisive. After all, if United Energy were granted the “Default” status, the movement of funds from the debtor would stop. Since this did not happen, United Energy withdraws UAH 657 million to the accounts of New Energy Ukraine. After which “New Energy Ukraine” actively uses these funds, receiving income.
After conducting an audit in May 2022 against New Energy Ukraine, NABU opens criminal proceedings on illegally obtained funds as a result of a criminal violation for their further legalization. And the High Anti-Corruption Court arrests 657 million hryvnia in New Energy Ukraine.
Moreover, at that time, the management of Ukrenergo received significant bonuses: the chairman of the supervisory board, Shevki Ancuner, received 1.5 million hryvnia, and the former acting chairman of the board, Vsevolod Kovalchuk, received 5.5 million hryvnia.
Ukrenergo's appeal of the debt of Kolomoisky's company
And the most interesting thing is that the National Energy Company Ukrenergo tried to appeal the results of the State Audit Service, which revealed violations on the part of Ukrenergo in the matter of failure to report to Oschadbank about the debt of United Energy LLC. However, judge Evgeniy Marich, considering the arguments of both sides, confirmed that Ukrenergo indeed violated the current legislation, which resulted in losses to the state in the amount of 1 billion 130 million 632 thousand 999 UAH, as stated in the court ruling dated October 10, 2023.
However, this is not the end of the matter and Ukrenergo is now trying to recover funds from Alliance Bank, which at one time provided a bank guarantee to United Energy LLC.
Another misuse of funds discovered by auditors concerns the distribution of funds by international financial institutions.
Under the chairmanship of Vladimir Kudrytsky, the management of Ukrenergo entered into contracts with contractors for all kinds of construction work and the supply of equipment. Contracting companies included a representative office of the Spanish company Instalaciones Inabensa SA, a representative office of the Azerbaijani Azenco ASC, the Ukrainian company Khoros LLC, as well as the corporation of industrial and commercial enterprises Soyuz. However, as practice has shown, the work was performed and supplied only by Ukrainian subcontractors. In addition, the audit revealed that work was completed for UAH 666.4 million less than expected in the contracts.
Another example of theft of funds is the agreement between Ukrenergo and the Soyuzkomplekt enterprise, which is registered in Kazakhstan.
The agreement provided for the technical modernization of the 330 kV Novokievskaya substation, which was supposed to increase the power of the substation from 400 to 600 MVA through the supply and installation of equipment worth more than $31 million.
However, the auditors found that the difference between the cost of the work performed and the cost of the work provided for in the contract amounted to 280.5 million hryvnia, which is 37.7% of the total cost of the contract. It is also important that these works were financed by loans from international financial organizations.
Double the tariff
Back in September, Ukrenergo published a draft of new tariffs for 2024. In simple words, the tariff for dispatching and transmitting electricity will increase by about 2 times. Yes, you didn't think so.
The last time tariffs for dispatch and transmission of electrical energy were increased was in December 2022. Then NEURC approved an increase in three stages during the first half of 2023. As a result, the electricity transmission tariff increased by 40%, and the dispatch tariff by 54%.
It seems that Ukrenergo is trying to inflate the expenditure part of transmission and dispatch tariffs as much as possible for no reason.
Consequently, probable unprofessionalism or negligence in the work of Ukrenergo led to significant fines and misuse of funds. Is it really possible that at a time when every ordinary Ukrainian, “from young to old,” is trying to donate for the front, “Ukrenergo” is simply trying to get into the pockets of Ukrainians - raising tariffs to cover its miscalculations or corrupt deals?
The editors turned to Ukrenergo with a request to explain the reasons for increasing tariffs without proper reasons and whether damage to the state amounting to more than 1 billion hryvnia was confirmed in connection with the violation of current legislation.
