DTEK Seeks $350 Million to Rebuild Thermal Power Plants Damaged by Russian Attacks

DTEK, Ukraine's largest private energy company, announced on April 22, 2023, that it is seeking $350 million to rebuild thermal power plants damaged by Russian attacks. The power plants were targeted during the ongoing Russian invasion of Ukraine, which has caused significant damage to the country's energy infrastructure.

According to DTEK, 80% of its thermal power units were damaged in the attacks, while the state-owned Centrenergo lost 100% of its generation capacity. The Ukrainian government had previously focused on concrete protection of power facilities, spending over UAH 50 billion on this approach, rather than acquiring air defense equipment or diversifying the energy sector with gas-fired power plants. However, the concrete protection measures were not sufficient to prevent the damage from the Russian strikes.

Volodymyr Kudrytskiy, the chairman of Ukrenerho's board, estimated losses of at least 100 million euros due to the attacks on Ukraine's energy infrastructure. Serhiy Kovalenko, the head of the Yasno distribution firm, stated that DTEK lost 50 percent of its capacity as a result of the attacks. The Energy Ministry reported that Russia attempted to hit a critical energy infrastructure facility in the Lviv region on March 24, sparking a fire.

Why this matters: The attacks on Ukraine's energy infrastructure have caused problems with access to electricity, which has restrained GDP growth. The rebuilding of damaged thermal power plants is critical for Ukraine's energy supply and economic recovery amidst the ongoing Russian military aggression.

Ukraine has received a record $9 billion in external financing, with half the funds coming from the EU as bridge financing. The government has also approved the Ukraine Plan, which defines priority steps and measures for EU budget support. Inflation has slowed to 3.2% year-on-year, the lowest level since 2020, and the National Bank of Ukraine has lowered the policy rate to 14.5% in response to the low inflation and the resumption of aid from donors.

The Ukrainian military claimed to have hit two Russian military ships stationed at the annexed peninsula of Crimea in overnight strikes. Despite the challenges faced by the energy sector, transportation by railway and through the Ukrainian Sea Corridor is growing, contributing to the development of several sectors of the economy.

Key Takeaways

• DTEK, Ukraine's largest private energy firm, seeks $350M to rebuild damaged power plants.
• 80% of DTEK's thermal power units and 100% of Centrenergo's capacity were damaged by Russian attacks.
• Ukraine's energy infrastructure losses estimated at over 100M euros, impacting GDP growth.
• Ukraine received $9B in external financing, with half from the EU, to aid economic recovery.
• DTEK aims to use funds to restore damaged thermal power plants crucial for Ukraine's energy supply.