Centrenergo has paid more than UAH 475 million to the state mines since the beginning of April

Since the beginning of April, PJSC Centrenergo has paid more than UAH 475 million to the state mines to ensure operational activities and further shipments following the concluded contracts; Centerenergo has no debt to the state coal mining enterprises, the press service of the company reports.

Today, Centrenergo is the only consumer of coal from state-owned mines and purchases almost the entire volume of their production under direct contracts.

However, the company notes that the current purchase price of coal, UAH 1650/t, does not allow Centrenergo PJSC to reach the level of profitability, while private thermal generation companies have efficient coal plants that provide cost-effective generation at a competitive cost.

The solution to this issue is a prerequisite for effective work and maximization of budget revenues in the course of the forthcoming privatization of the enterprise. One of the ways to deal with the problem is to establish a vertically integrated company through the merger of PJSC Centrenergo with several potentially prospective state coal mines.

According to the order of the Cabinet of Ministers of Ukraine dated October 5, 2020 No.1215-r, a joint commission, including the members of PJSC Centrenergo, has finished its remote desk audit and the physical inspection of coal mines to estimate their potential. The analysis showed the absence of efficient coal mining enterprises capable of supplying coal at a price corresponding to the needs of thermal generation of PJSC Centrenergo.

The joint commission is setting the criteria for the selection of enterprises. Today, enterprises are developing business plans with the required amount of investment to achieve effective work. Now PJSC Centrenergo requires (according to the Order) up to 4.2 million tons of commercial products of the "G" brand per year.

The design capacity of state-owned mines is 32.6 million tons per year, with an actual production volume of 4.7 million tons per year, which shows the unprofitable and ineffective work of coal mining enterprises and the need for subsidies from the state budget.

Therefore, the creation of a vertically integrated company by merging PJSC Centrenergo with promising state mines and in the conditions of attracting a sufficient amount of investment for modernization will ensure the efficient operation of both Centerenergo and state mines.

This model of including coal enterprises in a vertically integrated company with PJSC Centrenergo will make the company attractive to a potential investor in the course of the upcoming privatization, as well as create opportunities for miners to work, pay salaries on time and solve social problems of miners.

To recap, Centrenergo has changed its head.

As reported, Dobropilliavuhillia is the No.1 candidate for joining Centrenergo.

Tags: coal mining, legislation, electricity, Top management, coal, electricity market, Centrenergo, debt, coal mining, price, coal mine

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