Category: Ukraine

Avellum, working with Kirkland & Ellis, has advised Aspia on its acquisition of Accountor Outsourcing.

Aspia offers technology-enabled accounting, payroll, tax, and advisory services in Sweden, Norway, Finland, and Denmark.

Accountor Outsourcing is a provider of accounting, payroll, and professional services in the Nordic region.

According to Avellum, “the acquisition aims to expand and strengthen Aspia’s presence in the Nordics and increase its European footprint. With market leadership positions in their respective home markets, Sweden and Finland, as well as combined top five positions in Norway and Denmark, the combination will allow clients of both businesses to be better served across their needs and benefit from a materially larger platform with increased investments in automation and digitalization.”

The Avellum team included Managing Partner Mykola Stetsenko, Managing Associate Maryna Buinytska, and Associate Olha Rudevych.

Avellum did not respond to our inquiry on the matter.

Avellum has advised Knorr-Bremse on obtaining merger clearance from the Antimonopoly Committee of Ukraine for its acquisition of Alstom Signaling via its subsidiary Knorr Brake Holding Corporation.

According to Avellum, the transaction was valued at approximately EUR 630 million.

Knorr-Bremse is a braking systems company and a provider of rail and commercial vehicle systems.

Alstom Signaling is a conventional rail signaling technology business in North America.

The Avellum team included Partner Mykyta Nota, Managing Associate Olha Samoilenko, and Associate Veronika Humeniuk.

With effect from 11 July 2024, the National Bank of Ukraine (“NBU”) introduced a long-awaited exemption from the moratorium on foreign currency cross-border transfers (“Moratorium”). This exemption is expected to facilitate the repayment of Eurobonds by major Ukrainian corporate issuers, which had faced significant challenges in making payments under their Eurobonds since the beginning of the full-scale russian invasion of Ukraine on 24 February 2022.

The NBU allowed Ukrainian companies to repatriate dividends to their foreign participants/shareholders, provided that the following conditions are met:

• the foreign participant/shareholder is an issuer of Eurobonds admitted to trading on a foreign stock exchange, or the foreign participant/shareholder, the issuer of Eurobonds and the Ukrainian company are members of the same group;
• the Ukrainian company acts as a surety/guarantor for the issuer’s obligations under Eurobonds;
• Eurobonds are in circulation as of 10 July 2024;
• the transfer of foreign currency for dividend repatriation is limited to the amount of upcoming coupon payments on Eurobonds due from 10 July 2024 onward;
• the purchase and/or transfer of foreign currency for dividend repatriation is allowed no earlier than 10 calendar days before the due date of the corresponding coupon payment on Eurobonds;
• if two or more Ukrainian companies act as sureties/guarantors for the issuer’s obligations under Eurobonds, all foreign currency transfers by these companies for dividend repatriation must be made through a single servicing bank; and
• the Ukrainian company must provide the servicing bank with all necessary supporting documents and information to evidence compliance with the above requirements.

Importantly, limitations on the repatriation of dividends described in our earlier legal alert do not apply to the repatriation of dividends under this new Eurobonds-related exemption.

Together with the above exemption, the NBU also introduced other measures to ease existing currency control restrictions allowing Ukrainian companies to:

(i) purchase foreign currency to credit debt service reserve accounts in compliance with loan agreements with international financial institutions;

(ii) make payments under suretyships/guarantees securing obligations of Ukrainian borrowers under loan agreements with foreign lenders, provided that the repayment of such loans is allowed under specific exemptions from the Moratorium;

(iii) pay fees to foreign banks for services related to sovereign borrowing transactions of Ukraine;

(iv) transfer funds to foreign companies that are fully or partially owned by foreign states under agreements for coverage of war risk caused by the russian military aggression against Ukraine;

(v) satisfy claims of non-residents acting as sureties/guarantors or insurers under the obligations of Ukrainian borrowers under the foreign loans backed by way of a suretyship/guarantee from international financial institutions or insured or backed by way of a suretyship/guarantee from foreign export credit agencies or foreign development finance institutions; and

(vi) pay fees (duties) related to the protection of intellectual property rights, including for services of foreign patent offices and foreign patent attorneys.

The NBU’s recent exemption from the Moratorium represents a crucial step towards facilitating Eurobonds repayments and enhancing financial stability for major Ukrainian corporate issuers. These measures, coupled with broader currency control easing, aim to bolster Ukraine’s investment attractiveness and support economic resilience effectively.

Additional notes

This LEGAL ALERT is issued to inform AVELLUM clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The information above does not constitute legal or other advice and should not be considered a substitute for specific advice in individual cases.

By Glib Bondar, Senior Partner, Avellum

Sayenko Kharenko has advised the European Fund for Southeast Europe on a EUR 10 million equivalent loan in UAH to Bank Lviv.

EFSE is a privately managed development finance fund initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development and the European Commission. EFSE uses capital provided by donor agencies, international financial institutions, and private institutional investors to finance MSEs in the target region, which includes Ukraine. 

Bank Lviv is a regional bank headquartered in Lviv providing banking services to MSMEs and private clients across western Ukraine.  

According to Sayenko Kharenko, “the loan facility, formalized during the Ukraine Recovery Conference in Berlin, will reinforce Bank Lviv’s support for micro, small, and medium-sized enterprises. Additionally, the financing will be accompanied by dedicated MSME grants that will facilitate access to finance, helping MSMEs to secure business continuity and viability.”

In 2023, Sayenko Kharenko advised the European Fund for Southeast Europe on EUR 4 million MSME financing to Bank Lviv (as reported by CEE Legal Matters on October 20, 2023).

The Sayenko Kharenko team included Partner Igor Lozenko, Senior Associate Oles Trachuk, Associate Yevhen Koval, and Junior Associate Polina Savinska. 

Vasil Kisil & Partners has successfully represented Rost Agro in a UAH 33 million tax dispute before the Court of Appeal.

Rost Agro is a Ukrainian producer and exporter of seed products.

According to Vasil Kisil & Partners, the administrative court of appeal “stressed that Rost Agro had no right to resort to court due to specific aspects of the domestic law of the counterparties’ country of registration, with whom Rost Agro entered into foreign trade agreements. Therefore, the fact that Rost Agro applied to a notary for an executive endorsement was considered a circumstance leading to the suspension of the period to charge penalties for violating the time limits set for making settlements under foreign trade agreements between a Ukrainian resident legal entity and a foreign resident legal entity.”

Furthermore, the Court of Appeal affirmed the position taken by the lower instance court concerning the “implications of procedural violations committed by the tax authorities during the inspection. The court acknowledged that a tax inspection conducted in violation of legal prohibitions, such as the quarantine restrictions in effect, was a standalone ground for deeming the inspection findings unlawful.”

Vasil Kisil and Partners previously successfully represented Rost Agro in tax disputes in 2020 (as reported by CEE Legal Matters on February 27, 2020) and in 2018 (as reported by CEE Legal Matters on August 20, 2018).

The Vasil Kisil and Partners team included Senior Associate Yehor Svidlo and Associate Alina Ratushna.

CMS has advised Dutch Good Growth Fund on obtaining the necessary regulatory approval for its acquisition of a significant shareholding in the joint-stock company Joint Stock Bank Lviv. CMS has also advised Bank Lviv on certain transactional documents in the acquisition.

DGGF, a program commissioned by the Dutch Ministry of Foreign Affairs, aims to foster entrepreneurship in frontier markets through systemic and inclusive growth.

Bank Lviv is a Ukrainian SME bank that focuses its operations in the west of Ukraine.

The CMS team Partners Ihor Olekhov, Olga Belyakova, and Tetyana Dovgan, Senior Associates Mykola Heletiy, Mariana Saienko, and Louise Cakar, Associates Bohdan Ilchenko, Oleksandr Sytnyk, and Ihor Pavliukov, and Trainee Ruslan Dotsenko.

A summary of recent legislative developments in the fields of energy and natural resources in Ukraine.

Electricity

1. Ensuring stable functioning of the electricity market | On 30 April, the NEURC adopted amendments to the Resolution on Ensuring Stable Functioning of the Electricity Market, Including the Financial Condition of Electricity Market Participants for the Period of Martial Law in Ukraine. The amendments include:
   • introduction of a provision on tracking negative balances by NPC Ukrenergo
   • providing for an exception for aggregators in applying the rule according to which market participants, when conducting transactions for the purchase and sale of electricity under bilateral contracts, must avoid transactions that result in a negative balance of more than 1 MWh for the billing period

2. Amendments to the Procedure for Setting of Tariffs for Electricity Transmission Services | On 30 April, the NEURC adopted amendments to the Procedure for Setting (Formation) of Tariffs for Electricity Transmission Services, which bring the legislation in line with the Transmission System Code (TSC) by:
   • developing the Transmission System Operator’s investment programme and reports on its implementation
   • streamlining the procedure for submission and timely review of the investment programme
   • determining a detailed list of necessary supporting materials for the measures proposed to be implemented under the investment programme
   • settlement of the implementation issue of the Transmission System Operator’s investment programme measures

4. Simplifying the connection of generating facilities to the power grids | On 8 May, the NEURC adopted amendments to NEURC Resolution No. 352 to simplify the connection of generating facilities to the power grids. The Resolution provides for:
   • a procedure for the rapid connection of generating facilities by 1 January 2026, subject to a certificate from the military administration on the need for urgent connection of such facilities
   • business entities planning to install solar or wind power facilities must install energy storage facilities with a capacity equal to or greater than the capacity of the generating facility and a capacity to ensure 4 hours of operation at full capacity
   • the simplified procedure does not limit the possibility of connecting to the electricity grids by the Code of Distribution Systems or the Procedure for Temporary Connection
5. Use of additional revenues by SE Guaranteed Buyer | On 17 May, the NEURC adopted the Resolution on Using Additional Revenues by SE Guaranteed Buyer. The company was permitted to use funds from sources other than payment for services. This funds ca be used to ensure an increase in the share of electricity production from alternative sources and revenues from sales on the electricity market, including fines and penalties received.
6. Possibility of offsetting similar counterclaims | On 22 May, the NEURC adopted the Resolution on Ensuring the Stable Functioning of the Electricity Market, Including the Financial Condition of Electricity Market Participants for the Period of Martial Law in Ukraine. The Resolution allows for offsetting similar counterclaims by market participants in the event of mutual debts arising under an agreement on the settlement of electricity imbalances or an agreement on participation in the balancing market.
7. Improvement of the Methodology for Setting the Fee for Connection to the Transmission and Distribution Systems | On 28 May, the NEURC adopted amendments to the Methodology for Setting the Fee for Connection to the Transmission and Distribution Systems. The amendments include:
   • improvement of the calculation of payment rates for standard and non-standard connection
   • updating the system operators’ reporting to the regulator
   • introduction of a connection monitoring system for the exchange of information between operators and the regulator
   • improving approaches to calculating the deficit or surplus of funds
   • establishing the specifics of determining the fee for connecting electrical installations to a small distribution system
8. Adaptation of the Transmission System Code to European norms | On 28 May, the NEURC adopted the amendments to the Transmission System Code, which provide for:
   • clarification of the provisions in line with European legislation on the participation of the Ukrainian Transmission System Operator in the compensation agreement between transmission system operators
   • alignment of the provisions of the Transmission System Code with the requirements of the Law of Ukraine “On the Electricity Market” regarding operations with wholesale energy products

Gas/oil

1. Increased capacity at the borders | On 30 April, the NEURC adopted the Resolutions on Increasing Capacity at the Entry Point of the Interconnector with Poland, Moldova and Romania, which agreed on new increased capacities between the gas transmission system of the respective country and Ukraine and general terms and conditions to which transmission customers must agree to access capacity at the mandatory stage of allocation of new capacity at the border.
2. Improvements to gas storage regulation | On 30 April, the NEURC adopted the amendments to the Methodology for Determining and Calculating Tariffs for Natural Gas Storage (Injection, Withdrawal) Services for Gas Storages Subject to Regulated Access, which provide for improvements to the provisions in connection with the extension of capacity allocation periods, including in terms of changing the name of natural gas storage, injection and withdrawal products.
3. Simplification of connection procedures | On 30 April, the NEURC adopted amendments to the Resolution on Peculiarities of Providing Services for Connection to Gas Distribution Systems during Martial Law, which simplifies the procedures for connecting gas turbine or gas piston plants, including cogeneration plants, to gas distribution systems.

Licensing

1. Amendments to the tariff setting for dispatching services | On 30 April, the NEURC adopted amendments to the Procedure for Setting the Tariff for Dispatching (Operational and Technological) Services, which brought the procedure in line with the amendments to the Transmission System Code and the Procedure for Monitoring Compliance by Licensees Operating in the Energy and Utilities Sectors with the Legislation in the Relevant Areas and License Conditions to ensure the principle of transparency.
2. Amendments to the control over compliance with license conditions | On 8 May, the NEURC adopted amendments to the Procedure for Monitoring Licensees’ Compliance with License Conditions and Legislation in the Energy and Utilities Sectors to clarify the provisions on non-extension of its effect to violations related to abuse of power in the wholesale energy market. The amendments also clarify the requirements of the Methodology for Determining the Amounts of Excessive or Under-received Income of a Transmission System Operator from Electricity Transmission Activities.
3. Improvement of organisational requirements for licensed activities regarding REMIT | On 8 May, the NEURC adopted amendments to certain resolutions that improve the organisational requirements for conducting licensed activities. These amendments include the need to register as a participant in the wholesale energy market, provide insider information, and avoid manipulation or attempts to manipulate the wholesale energy market.
4. Regulation of certain inspections | On 12 June, the NEURC adopted amendments to the Procedure for Monitoring Compliance by Licensees Operating in the Energy and Utilities Sectors with the Legislation in the Relevant Areas and Licence Conditions to regulate certain inspections of business entities located and operating in the regions of Ukraine where active hostilities are ongoing and territories occupied by russia. 

Regulation of energy markets

1. Amendments to market monitoring | On 4 June, the NEURC adopted amendments to the Procedure for Monitoring Markets in the Energy and Utilities Sectors, which regulate certain issues related to the definition of the object and subject of monitoring, expansion of the monitoring objective, tasks of monitoring units, data sources, and the procedure for using monitoring results.
2. Improvement of the mechanism for submitting bids by market participants | On 4 June, the NEURC adopted amendments to the Market Rules to improve the mechanism for submitting bids by market participants for ancillary services auctions and the balancing market. The amendments also improve the Procedure for the Provision of the Load-Following Service for Renewable Energy Sources with Support.
3. Amendments to the Balancing Market settlements with the use of Escrow | On 26 June, the NEURC adopted amendments to the Market Rules to improve the functioning of the balancing market settlement mechanism with the use of escrow accounts.

Other

1. Strategy of the climate policy of Ukraine until 2035 | On 30 May, the government approved the Strategy for the Formation and Implementation of the State Climate Change Policy for the period up to 2035 and the operational plan for its implementation in 2024-2026 with the aim of creating a state climate change policy to achieve sustainable development and ensure an effective transition to low-carbon development of the state and to take into account the goals of the state climate policy during the post-war reconstruction of Ukraine.
2. Draft law on the basic principles of climate policy | On 31 May, the Parliament received a Draft Law on the Basic Principles of State Climate Policy, which aims to define the principles of the state climate policy aimed at ensuring low-carbon development of Ukraine, achieving climate neutrality, adaptation to climate change, and fulfilling Ukraine’s international obligations in this area. The draft act defines:
   • peculiarities of forming and achieving the goals of the state climate policy
   • the principles of climate planning at the national, regional, and local levels
   • peculiarities of reporting by the requirements of the United Nations Framework Convention on Climate Change and data collection for these purposes
   • basic principles of the national system for tracking the implementation of climate change policies, measures, and forecasts
3. Stabilisation of the unified energy system | On 7 June, the Cabinet of Ministers adopted a decree that provides for several measures to stabilise the operation of the unified energy system of Ukraine. According to the document:
   • ministries, other central executive authorities, regional and Kyiv city state administrations must ensure energy savings by 31 December 2024
   • the restrictions do not apply to healthcare facilities, enterprises for which air conditioning is part of the technological process, and technical measures for traffic management
   • the respective saving measures do not apply to electricity generated by consumers’ own power-generating facilities for their needs
4. Amendments to the Procedure for Determining the Amount of Fines | On 12 June, the NEURC adopted amendments to the Procedure for Determining the Amount of Fines Imposed by the National Energy and Utilities Regulatory Commission to clarify the circumstances under which a reduction in the amount of a fine may be applied.
5. Establishment of a register of biofuel installations | On 18 June, the Parliament decided to adopt as a basis the draft Law of Ukraine on Amendments to the Law of Ukraine “On Alternative Fuels” on the establishment of a register of installations using biofuels as the only type of fuel, submitted by the Cabinet of Ministers of Ukraine.
6. Amendments to the Methodology for Formation, Calculation and Setting of Tariffs | On 19 June, the NEURC adopted amendments to the Methodology for Formation, Calculation and Setting of Tariffs for Electricity and/or Heat Energy Generated at Combined Heat and Power Plants, Thermal Power Plants and Cogeneration Plants, which are aimed at improving the process of formation, calculation and setting of tariffs for electricity and heat energy generated at combined heat and power plants, thermal power plants and cogeneration plants. The amendments aim to ensure Ukraine’s energy security in the face of a coal shortage caused by Russia’s military invasion and problems with coal supplies.  
7. Introduction of auctions for ancillary services providers | On 26 June, the NEURC adopted amendments to the Market Rules and Methodology for Pricing Ancillary Services, which provide for:
   • introduction of special auctions for the purchase of frequency control reserves and active power from an ancillary service provider or potential ancillary service provider
   • ensuring participation of ancillary services providers and potential providers in the auctions
   • contractual terms and guarantee fees for participation in auctions
   • ensuring proper characteristics of equipment for the provision of services
   • clarifying the application of prices for ancillary services throughout the entire service provision period

By Yaroslav Petrov, Partner, Asters

On 11 July 2024, new foreign currency (“FX”) easings came into effect to increase Ukraine’s investment attractiveness and raise private foreign capital. Specifically, the latest package of amendments, introduced by Resolution No. 83 of the National Bank of Ukraine (the “NBU”) dated 09 July 2024 (“Resolution No. 83”), includes the following FX liberalization measures.

1. Permission to fulfil obligations under sureties and guarantees, conduct payments under letters of credit, guarantees, and counter-guarantees

To ensure that resident borrowers fulfil credit obligations to non-resident entities, the NBU has allowed them to make payments under documentary and standby letters of credit/guarantees/counter-guarantees opened since 24 February 2022. It has also granted other residents the right to make cross-border transfers under provided guarantees and/or sureties. It is important to note that such transactions can only be carried out if they secure a loan for which payments are permitted under current FX regulations.

2. Permission to make payments under war risk coverage agreements

From now on, it is allowed to make transfers abroad under agreements that provide for the coverage (insurance) of war risks – loss and/or damage to assets and/or loss (full or partial) of income from such assets in Ukraine as a result of war, hostilities, military operations, terrorist acts, sabotage caused by the aggression of the Russian Federation against Ukraine. However, such transfers are allowed only for non-resident legal entities whose shareholders include a foreign state (except for the Russian Federation and the Republic of Belarus).

3. Permission to accumulate FX funds for repayment of loans from IFI

Resolution No. 83 granted resident borrowers the right to purchase FX funds to accumulate them for future payments under loan agreements concluded with international financial institutions (“IFIs“). The amount of funds that can be held in an FX account is determined according to the terms of loan agreement. However, funds purchased for such purposes can be used exclusively to repay obligations to IFIs.

4. Clarifying the terms of the Eurobond repayment

The NBU has introduced changes aimed at improving the repayment possibilities of certain external debts. In particular, Resolution No. 83 allowed dividend payments in favor of a related non-resident legal entity that is the issuer of foreign debt securities admitted to trading on a foreign exchange (“Eurobonds“). It is established that a resident has the right to pay dividends in an amount not exceeding the next interest income payment (coupon payments) in accordance with the terms of the Eurobonds.

It is important to clarify that when carrying out the described transactions, general restrictions on dividend payments for corporate rights do not apply (such as limits on the maximum amount of transfers permitted within a single month) that were previously allowed by the NBU earlier this year (more details on the procedure of dividend payment can be found in this Legal Alert).

5. Permission for transfers to satisfy claims of guarantors, sureties, and insurers

From now on, it is allowed to make transfers to satisfy the claims of foreign export credit agencies, foreign states or IFIs that participate in the provision of an external loan to a resident of Ukraine through surety, guarantee or insurance. This amendment allows, in particular, to reimburse the costs incurred by such non-resident entities arising from their participation in the provision of loans to Ukrainian borrowers.

6. Other FX easing measures

In addition to measures aimed at improving investment attractiveness, Resolution No. 83 contains a number of other important easings, including:

• the list of defence goods that can be purchased abroad by individual volunteers has been expanded
• permission for foreign companies to make charitable contributions from UAH bank accounts
• Permission for individuals to return social payments received in a foreign country
• clarification of the provisions regarding the existing limit of 100,000 UAH per day for acquiring FX cash

By Roman Stepanenko, Partner, and Kateryna Oliynyk, Counsel, Asters

On 25 April 2024, Ukrainian Parliament adopted the Law of Ukraine “On Amendments to the Labour Code of Ukraine on Establishing Additional Grounds for Termination of Employment Agreement at the Initiative of the Employer and Certain Other Issues” (the “Law”), which is aimed at strengthening the protection of Ukraine’s national security.

On 4 June 2024, the Law was revised and re-adopted considering the proposals of the President of Ukraine. In particular, the provision on the mandatory notification of the employer about the existing ties of the employee with individuals located on the territory of the aggressor state or the temporarily occupied territory of Ukraine was excluded.

New grounds for dismissal. According to the Law, an employer may terminate an employment agreement on the following grounds:

• conviction of an employee for committing a crime against the national security of Ukraine (except for exemption from serving a sentence with probation)
• non-compliance by the employee with the rules that oblige employees not to disclose information with limited access (state, commercial secrets) and establish conditions for working with confidential information

The rules of conduct are a part of the internal labour regulations and, their adoption becomes mandatory for entities of strategic importance for the economy and security of the state and critical infrastructure facilities or operators.

New grounds for suspension from work. Commencement of an official investigation by an employer listed as state-owned object of strategic importance for the economy and security of the state or critical infrastructure facility may serve as a ground for suspension of an employee.

The changes come into force on 27 September 2024.

By Inesa Letych, Сounsel, Asters

The National Commission for State Regulation of Energy and Public Utilities (NEURC) issued Resolution No. 1172 on 26 June 2024 “On Approval of Amendments to Certain NEURC Resolutions. This resolution allows for the signing of five-year agreements in the ancillary services market by introducing special auctions.

Details about the special auctions and their requirements are provided below.

Ancillary Services Market

The ancillary services market is a distinct segment of the electricity market where NPC Ukrenergo, as the transmission system operator, purchases services to ensure the reliable operation of the power system. There are two types of ancillary services:

1. Frequency and Active Power Control Services in the UES of Ukraine, which include:

• Frequency Maintenance Reserve (FMR)
• Frequency Restoration Reserve (FRR)
• Replacement Reserve (RR)

2. Services to Maintain the Reliability and Quality of Electricity in the UES of Ukraine, including:

• Voltage and Reactive Power Regulation Services
• Services to Ensure the Restoration of Power System Functioning After System Failures

Procurement is conducted through an auction system, and participants shall be certified to take part. The costs associated with ancillary services are included in NPC Ukrenergo’s dispatching tariff.

Special Auctions for Ancillary Services

On 26 June, the NEURC adopted amendments to the regulation of the ancillary services market, introducing special auctions for providing the power system with frequency and active power control reserves for a period of one to five years, with the possibility of a three-year extension.

Eligibility for Special Auctions

Special auctions are open to two types of entities:

1. Ancillary Service Providers (ASPs) – business entities that have acquired the status of an ancillary service provider and possess the technical capabilities to provide ancillary services through a unit of selection, release, storage, or aggregation of electric energy.
2. Potential Ancillary Service Providers (PASPs) – business entities that have entered into an agreement to provide ancillary services for frequency and active power control in the future, as published on the NPC Ukrenergo website. Each potential unit, i.e., each power supply or storage facility with a total capacity of at least 1 MW, shall be represented in the ancillary services market.

The ASP can enter into an ancillary services agreement in the future only if it intends to introduce a potential ancillary services unit to the market.

Financial Requirements for Participation

To participate in the special ancillary services auction, both ASPs and PASPs shall meet certain financial requirements:

1. Guarantee Fee – EUR 5,000 per potential unit, to be transferred to NPC Ukrenergo or an escrow account no later than seven business days before the auction.
2. Financial Security – EUR 30,000/MW, to be placed in an escrow account within 30 calendar days from the publication of the auction results or completion of the appeal procedure.

Refund Policies

NPC Ukrenergo will refund the Guarantee Fee within five business days if:

1. The ASP or PASP does not win the auction
2. The PASP wins the auction and transfers the financial security

NPC Ukrenergo will return the Financial Security within 30 calendar days from the commencement of the ancillary services period if the ASP or PASP:

1. Ensures that the technical characteristics of the equipment of the potential unit correspond to the volume and type of ancillary services sold at the special auction
2. Obtains the status of an ASP for the potential ancillary services unit

Implications of These Changes for Businesses in Ukraine

The new amendments permitting long-term agreements with deferred service delivery will significantly benefit businesses. Companies can now secure bank loans to build new capacity with the assurance of guaranteed future demand. Given the current state of the energy system, this measure is crucial for encouraging investment in energy storage in Ukraine.

We anticipate that these auctions will be launched soon, further stimulating investment and development in the energy sector.

By Yaroslav Petrov, Partner, and Kateryna Andarak, Associate, Asters