Ukraine's Ukrenergo notifies Russia of investment dispute over Crimean assets

Acting CEO of the operator of the Ukrainian integrated power grids Ukrenergo Vsevolod Kovalchuk has announced the company handed official notification over to the Russian side about an investment dispute over Ukrenergo's assets in Russian-occupied Crimea.

"A few days ago, Ukrenergo officially notified the Russians of the investment dispute regarding the assets of our company in Crimea. Foreign Minister Sergei Lavrov, Finance Minister Anton Siluanov, Justice Minister Alexander Konovalov, Prime Minister Dmitry Medvedev, and Russian President Vladimir Putin have received envelopes [with notifications]," Kovalchuk wrote on Facebook on April 10.

Read alsoUkrenergo sets up center to counter cyber attacksAccording to Kovalchuk, lawyers of the international law firm Covington & Burling LLP, who helped to file a similar claim from NJSC Naftogaz of Ukraine, are representing Ukrenergo in the case.

He says that if the company fails to settle the dispute peacefully by the end of September, Ukrenergo will lodge a lawsuit with the International Arbitration against Russia as Naftogaz has already done.

"Our lawsuit will concern not only the property that we have lost because of the annexation of the peninsula, but also the revenue we have failed to earn due to the loss. We cannot turn a blind eye to these enormous losses and live on as if nothing has happened. After all, our Crimean electric grid alone costs about US$1 billion. These are thousands of transmission lines, dozens of substations and many other facilities, not to mention two recreation centers where Ukrainian energy workers used to stay," he said.

As UNIAN reported earlier, in the spring of 2014, Russia seized the Crimean peninsula in violation of international law. Ukrainian Justice Minister Pavlo Petrenko earlier stated that damage from the Russian occupation of Crimea is estimated at UAH 1.8 trillion (US$69.3 billion).

Kovalchuk reported that in the annexed Crimea, Ukrenergo lost about 15 substations and several thousand kilometers of the 220 kV and 330 kV transmission lines.

The national energy company, Ukrenergo, operates trunk and inter-state transmission lines and is in charge of centralized control over Ukraine's integrated power grids. It is wholly owned by the state and subordinate to the Energy and Coal Industry Ministry.