Changes made by the Ministry of Energy to the charter of NEC Ukrenergo with a provision on a qualified majority of votes for the appointment of the chairman of the board, has provoked a sharp reaction from the company’s creditor, the European Bank for Reconstruction and Development, threatening the loss of access to a €141 million loan and grant, as well as early repayment of the €533 million already received, according to Maksym Khlapuk, a member of the Verkhovna Rada’s energy committee (Holos).
“The Ministry of Energy has pushed Ukrenergo into a real, not technical, default. The amendments to the company’s charter, which the Ministry of Energy introduced to strengthen its influence over it, have already hit the financial stability of the critical energy infrastructure operator. Yesterday, the EBRD, referring to the Ministry of Energy’s order on amendments to the charter, emphasized its right to suspend the disbursement of loan funds and demand early repayment of the loan already provided,” Khlapuk wrote on his Facebook page on Saturday, publishing an excerpt from the EBRD’s letter to Ukrenergo and the Ministry of Finance of Ukraine dated June 6.
It points to the company’s failure to notify the bank in a timely manner of any changes to the charter and to provide an opportunity to comment on them.
Referring to the terms of the loan agreements, the bank emphasizes its right to suspend disbursements and send appropriate notices of early repayment of loans in connection with changes to the charter.
“This situation threatens Ukrenergo not only with the loss of access to further EBRD financing in the amount of EUR 141 million (EUR 77 million of unutilized loan balance and EUR 64 million of expected grant), but also with the need for early repayment of funds already received in the amount of EUR 533 million,” emphasized a member of the Rada’s energy committee.
He also notes that the restructuring of Ukrenergo’s debt obligations to holders of green sustainable development bonds, for which the company planned to raise $430 million on international capital markets under the DFC guarantee, is now under threat.
“This debt management operation should have been completed in early July, but its success directly depends on the support of international financial institutions. And, according to my information, the DFC has currently suspended any actions related to the restructuring of green bonds,” Khlapuk emphasized.
As reported, on May 19, the Ministry of Energy amended the charters of LLC “OGTSU” and “Ukrenergo” with a provision on a qualified majority of votes of the Supervisory Board for the appointment of managers instead of a simple majority. This means that four out of five members of the supervisory board (three of whom are independent) must vote for the head of OGTSU, and five out of seven (four of whom are independent) must vote for the head of Ukrenergo.
As commented to EnergoReform by the head of the Association for Energy Efficiency and Energy Saving, former head of the Department for State-Owned Enterprises and Corporate Rights of the State Property Fund of Ukraine, Oleksandr Vizir, the Ministry of Energy, as a shareholder of Ukrenergo had the right to amend the company’s charter, and the provision on a qualified majority of votes is completely legal from a legal point of view. However, he drew attention to the way in which this was done. “For example, as far as I know, the amendments to the charter were not agreed with the supervisory board of Ukrenergo, nor with the company’s creditors, which is a condition of loan agreements in most cases,” Vizir explained in a comment. Vizir expressed his conviction that this would also delay the appointment of the chairman of Ukrenergo’s board, which should have taken place long ago, since the members of the supervisory board – representatives of the state and the Ministry of Energy, as the appointing body – can now effectively block the candidacy of independent representatives.
“According to my information, the independent members of the supervisory board and the shareholder have very different views on who should head Ukrenergo. And in fact, changes to the charter regarding the voting structure for appointing the head in the midst of the competition give grounds for concluding that the shareholder cannot agree with the candidates selected by the supervisory board,” Vizir believes.
In his opinion, the Ministry of Energy also had no right to submit the charter for registration or authorize anyone to do so; the charter should have been registered by the head of the company, Oleksiy Brecht, as acting chairman of the board, or by a person with a power of attorney from Ukrenergo.
According to Energorforma, the supervisory board of Ukrenergo was scheduled to meet on June 4, but was unable to elect a chairman of the board.
EnergoReforma’s interlocutors familiar with the situation also pointed out that the Ministry of Energy did not consult with the Energy Community Secretariat on changes to the statutes of Ukrenergo and OGTSU certified by it, which also caused its negative reaction. They noted that the issue of changes to the statutes of the operators is already known to European institutions and creditors, who have asked the Ministry of Energy for explanations, and assumed that a position will be expressed soon. In their opinion, the Ministry of Energy needs to communicate this issue very carefully with all stakeholders and provide very convincing arguments “or abandon the proposed changes in order to save the situation.”
For his part, Ukrainian Energy Minister Herman Galushchenko, during Question Time in the Verkhovna Rada on June 6, explained that the purpose of the changes to the statutes of OGTSU and Ukrenergo was to strengthen the position of company executives vis-à-vis the NR.
“I believe that these changes are actually aimed at something else: to ensure the maximum independence of the supervisory board and to ensure that the relevant managers and members of the management boards can work in order to protect them from dismissal or other decisions by a majority vote,” he said.
The new supervisory board of Ukrenergo, formed at the end of 2024, includes Yuriy Boyko, Anatoliy Guley, and Oleksiy Nikitin as representatives of the state, as well as independent members Patrick Greichen, Luigi De Francisci, Jan Montell, and Eppe Kofod, who heads the NR.
NR Ukrenergo announced a competition for the position of chairman of the board on February 5, 2025, with applications accepted until March 14 inclusive.
A shortlist of three candidates for the position of chairman of the board was formed in mid-April. It included the acting head of the company, Oleksiy Brecht, its chief dispatcher and member of the board, Vitaliy Zaychenko, and another representative of the company, Ivan Yurik, who deals with Eurobond issues.
In connection with the submission by OGTSU CEO Dmitry Lippa of a statement on the early termination of his powers, the company will be temporarily headed by a member of the management board, operations director Vladislav Medvedev, until the completion of the competitive selection process. The deadline for accepting applications from candidates for the position of the next head of OGTSU was March 31.
