As a complex of industries engaged in power generation, transformation, transmission and distribution, energy industry is a basis of economic development of any country. It ensures technological processes in various industries, provides heat and energy to residential and public buildings and infrastructure. Process failures in the energy sector lead to negative and sometimes irreversible consequences in many sectors of economy and in social life as well. The key role of the energy industry has always been a cause of special attention from any government.
In 2014, Ukraine entered the most difficult period of its independence. Under these circumstances, the entire energy policy of the country needed a system reboot. As of 2017, three development strategy projects have already been designed, with the latest — the New Energy Strategy of Ukraine: Safety, Energy Efficiency, and Competition — having defined a set of pro-European reforms for the period up to 2035.
The new strategy is especially notable for focusing on the development of an energy-efficient society and the energy-independent economy of Ukraine. As part of structural reforms, the strategy provides for the transformation of energy markets in gas, electricity, heat power and coal sectors. The main characteristics of such transformation are transparency, competition, and liberalization. In order to attract investments, it has been proposed to take measures for “deoffshorization” of energy industry and capital amnesty, to ensure transparency of public procurement, to promote public-private partnership, to complete planned privatization sales, etc.
The new power industry development strategy was pioneered by the reform of the electric power sector, which was launched by the public discussion and further consideration of the draft Law of Ukraine “On Electric Power Market in Ukraine” in the Parliament. The law introduces a new structure of the electric power market where there is a new segment — the “intraday market”. There is also a new player in the market — a trader whose professional activity is aimed at positively influencing the market liquidity in general. To protect public interests in the operation of the electric power market, the Law also provides for the introduction of a system of specific commitments, such as purchase of electric power at a “green tariff”, provision of comprehensive services, compensation payments, performance of the function of the “last” hope supplier, etc. The Law provides for the adoption of a new regulatory framework consisting of intra-sector rules of operation of individual market segments and codes regulating the procedures for power transmission and distribution.
The most important event within the institutional component of the reform is the adoption of the Law of Ukraine “On the National Commission for State Regulation of Energy and Public Utilities” in 2016. The functionality of the National Commission as an independent regulator was extended as part of the obligations of Ukraine under the Treaty Establishing the Energy Community.
The AGRECA law firm is ready to render professional legal services for privatization and transactions in the secondary market of energy enterprises, i. e. regional power distribution and generation companies, hydroelectric power plants, and thermal power enterprises.
We have an extensive experience in supporting transactions for privatization of energy industry enterprises. As lawyers of the State Property Fund, the firm lawyers took part in the preparation and support of privatization tenders for the sale of shares in open joint-stock companies such as “Kyivoblenergo”, “Zhytomyroblenergo”, “Sevastopoloblenergo”, “Khersonoblenergo”, “Kyrovohradoblenergo” and “Rivneoblenergo”. In the course of preparation of the agreements our partners took part in the development of regulatory framework for involving the advisers of the Fund as well as of special procedures for the sale of shares in energy companies. The purchase and sale agreements concluded after tenders were resulted from complicated negotiations on forming unique conditions of sale that, for the first time in the history of privatization, provided for counter-obligations of a State, i. e. restructuring of debts of companies and application of a range of other measures approved by the relevant orders of the Cabinet of Ministers of Ukraine.
As legal advisers to private buyers, we also provided legal services to support privatization of energy distribution companies, thermal power stations, and heat-generating enterprises.
In order to maintain a high professional level, our firm constantly monitors the industry legislation and initiatives of state authorities, professional organizations, and businesses.
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