Investors in renewable energy sector applied with reservations on certain clauses of a draft law on FIT

The Dutch Development Bank (FMO), the Norwegian Guarantee Institute for Export Credits (GIEK) and the Nordic Environment Finance Corporation (NEFCO), direct and indirect investors in renewable energy sources, have contacted the Ukrainian government regarding draft law No.3658 “On improving the conditions for the production of electricity from alternative sources” and their impact on renewable energy projects in which they invested.

The total amount of commitments and investments made by the aforementioned investors exceeds €250 million.

After several months of negotiations in early June, a Memorandum of Understanding was signed between the government and two (out of three) associations in the industry – the Ukrainian Wind Energy Association (UWEA) and the European-Ukrainian Energy Agency (EUEA).

“Direct and indirect foreign investors believe that the position reached in the Memorandum is not a satisfactory compromise. We emphasize that before passing new laws that will affect FIT and the incentive tariff and imbalances (which are expected to be much more burdensome for producers), among other issues, a broader consensus is needed,” the statement said. .

Direct and indirect foreign investors are the primary important problem – the continuation of FIT for at least 2 years in a draft law No.3658.

In addition, foreign investors consider the proposed amendments incompatible with Ukraine’s obligations to promote and expand the presence of renewable energy sources in the energy balance of Ukraine.

It is noted that this could be a deterrent for future investments in Ukraine, especially in the field of renewable energy.

“The absence of an extension of FIT and a wider consensus on the entire package could cause, among other things, lawsuits in international arbitration due to a significant reduction in the reduced tariff, restructuring of contract debts and shareholdings. "We want to avoid such a development of events, and therefore we urge you to help achieve the best result by common agreement, which can be approved by direct and indirect foreign investors."

Recall that the Verkhovna Rada adopted a draft law to reduce FIT in the first reading.