KYIV. Aug 9 (Interfax-Ukraine) – Britain’s Active Energy has signed a Memorandum of Understanding with the regional government, relating to the management, development and sustainable commercialization of approximately 186,500 hectares of mature commercial forestry in northern Ukraine.
According to a report of Active Energy on the website of the London Stock Exchange (LSE), the document remains subject to contract and both parties are working towards completion as soon as practicable.
Active Energy, through its forestry management division AEG TimberLands, will work exclusively in introducing international forestry and environmental standards of sustainable forestry management to improve the value and yield of the forests.
This will be achieved through the implementation of more efficient logging practices and technologies and the efficient use of merchantable timber, which AEG WoodFibre can purchase for its processing operations at the Yuzhny port, near Odesa in Ukraine.
In addition, new commercial opportunities pursuant to the memo will allow increased utilization of forest waste, currently burnt in situ, for the production process of AEG CoalSwitch’s innovative fuel replacement product. Management envisage that a facility to manufacture AEG’s CoalSwitch product will be constructed close to the forestry, to create the supply of CoalSwitch to the region’s existing coal-fired power plants.
Ukraine’s State Agency of Forest Resources told Interfax-Ukraine that the agency was not the party of the memo.
“The Agency as a central executive power agency implementing the state policy in the area of forest and hunting sector does not sign memorandums of understanding with private companies that have the goal of getting profits,” the authority said.
The authority said that forest works and other measures aimed at balanced forest management in line with forest legislation is the privilege of economic entities.
The state agency said that it manages 73% of forests and 27% of them – to other permanent users, among which are central executive power agencies and regional councils.
“The Ukrainian forest sector really requires investment. The state agency believes it is not appropriate to transfer rights to mange the exploitation fund to foreign private companies, as this is not in line with the interests of the domestic forest products market,” the authority said.
As reported, Active Energy has 10-year contracts to buy wood and process it into fire wood chips (in Ukraine) and supply of products to energy facilities (in Poland). Liuboml forestry (Volyn region) supplied up to 100,000 of wood a year at the fixed price. Volyninvestbud makes fire wood chips from it at the fixed tariff and supplies up to 80,000 tonnes of finished products a year. Medium Sp. Z o.o. buys all products to deliver them to energy facilities in Poland.
The company’s shares are listed on the London Stock Exchange (LSE).
