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The following story is reported exclusively for Ukraine Rebuild Newswire by the law firm CMS Ukraine Cameron McKenna Nabarro Olswang LLP as part of a partnership created to better inform investors in Ukraine's reconstruction.
Ukraine's state electricity off-taker, named Guaranteed Buyer, is developing a plan to pay its accumulated debts to electricity producers operating under the Feed-In Tariff (FIT) scheme, and aims to clear all such debts this year, according to a senior official of the state enterprise.
The debts have already fallen 28% in the year through March to UAH 22.3 billion (€470 million) due to a series of measures, including loans secured by Ukrenergo, which operates the national electricity transmission system, said Kateryna Danylova, Deputy Director of Guaranteed Buyer.
The repayment roadmap, a critical step toward restoring stability in Ukraine's renewable energy sector, would apply to the remaining debts under the FIT scheme, but not to other segments of the renewable energy market, such as those operating under auctions or PPAs.
Guaranteed Buyer's debt under the FIT scheme, which is essentially a government-backed, fixed-price contract for green electricity, stood at UAH 22.3 billion (€470 million) last month, from UAH 30.8 billion a year earlier.
The debt, which has accumulated due to war-related disruptions, shortfalls in tariff collections and other factors, has served as a potential deterrent to attracting further investment in Ukraine's renewable energy sector, despite measures to stimulate its development.
The debt reduction shows strengthened institutional commitment to rebuilding investor trust and ensuring the long-term viability of the green energy market in Ukraine.
Guaranteed Buyer plays a central role in implementing the FIT mechanism in Ukraine. Acting as the designated off-taker, Guaranteed Buyer purchases all electricity from renewable energy sources producers operating under FIT and is responsible for ensuring timely and full payments.
CMS is a top 10 global, full-service law firm with 75 offices and over 4,800 lawyers worldwide, and is the largest law firm in Europe. CMS Ukraine, with 8 partners and over 30 domestic and internationally qualified lawyers, offers a full-service practice with unparalleled knowledge of the Ukrainian market. As part of the CMS Rebuilding Ukraine initiative, the team supports the National Recovery Plan, advises on legislative changes, and helps businesses navigate reconstruction and war-driven challenges.
