World Bank recommends rescheduling launch of new electricity market in Ukraine

15:33, 28 May 2019
Economy
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REUTERS

The World Bank, one of Ukraine's key lenders, supports the country's law on the electricity market aimed at introducing competition, but recommends rescheduling the launch of the new electricity market for October 1, 2019, due to unavailability of certain provisions of the regulatory framework and IT systems.

Read alsoWorld Bank: Ukraine not ready to launch new electricity market on July 1

"Since the adoption of this Law, we have provided financial and technical assistance to key market entities, including Ukrenergo and Energorynok, as well as to the Government and NEURC [the National Energy and Utilities Regulations Commission], to prepare for the market opening on July 1, 2019, as stipulated by the Law," the Representative Office of the World Bank in Ukraine wrote on Facebook on May 28.

"However, there are still important elements of the regulatory framework and necessary IT systems which are not ready for the market opening on July 1, 2019. A premature launch of the new electricity market before the necessary regulatory and technical means are in place could jeopardize proper market functioning and increase risks to all market participants," it said.

Furthermore, given the current political circumstances, including the upcoming parliamentary elections in July 2019, any difficulties in the power market operation during this period could backfire and be used to discredit the reform process, it added.

"Therefore, we recommend rescheduling the launch of the new electricity market for October 1, 2019, as also proposed by the Energy Committee of Verkhovna Rada [Ukraine's parliament]. We remain committed to continue our support to all market entities to complete the regulatory and technical activities required for a safe start of the new electricity market as soon as possible," reads the statement.

As UNIAN reported earlier, the Delegation of the European Union and the Representative Office of the European Investment Bank in Ukraine, as well as the European Bank for Reconstruction and Development recommended that the introduction of a new electricity market in Ukraine be postponed for a limited period due to unavailability of important regulatory standards and IT systems.

In turn, Ukrainian President Volodymyr Zelensky supported rescheduling the launch of a new electricity market for three months or one year.

UNIAN memo. In April 2017, the Verkhovna Rada passed the Electricity Market Law of Ukraine. According to one of the authors of the document, the bill will lead to a competitive relationship in the segments of electricity generation and supplies for final consumers, which will force producers to increase their efficiency and remove inefficient power generation from the market. The introduction of the new electricity market will also allow people to choose electricity suppliers. The first trading of electricity in the newly formed market segments is expected to start in Ukraine on July 1, 2019.

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