BELARUS NEWS AND ANALYSIS

DATE:

24/11/2010

Ukraine's DTEK Enters Belarus Energy Market

DTEK, Ukraine's leading fuel and energy company, has started exporting electricity to Belarus, Ukrainian Energy reports.??Vostokenergo (DTEK) is supplying 300 MW under the agreement signed with State Enterprise "Belenergo". The agreement initiated by the Belarusian side was concluded on September 1, 2010. In November 2010 Vostokenergo (DTEK) plans to export up to 136 million kWh of Ukrainian electricity to Belarus.??"DTEK's entry to the Belarusian energy market will boost Ukraine's electricity export by more than 30%. It also helps to optimize the balancing load of Ukrainian TPPs, increasing their profitability. Furthermore, the export sales of Ukraine's electricity will become more diversified", commented Maxim Timchenko, DTEK's CEO.?? On November 8, 2010, the Ministry of Fuel and Energy of Ukraine granted a permission to Vostokenergo (DTEK) to use the transmission capacity of the Ukrainian interborder electricity networks for exports to the Republic of Belarus if it was technically possible taking into account the capacity taken up by SFTC Ukrinterenergo. Pursuant to Cl. 1.11 of Order of NERC 'On Approval of the Auction Procedure for Access to the Transmission Capacity of the Interstate Electricity Transmission Network of Ukraine for Electricity Exports' #1207 dd. 22.10.2009, the Ministry of Fuel and Energy, being the authorized central executive body in the fuel and energy sector, defines the conditions for usage of available transmission capacity of the interstate electricity networks of Ukraine for a period before the auctions. ??According to art. 2 of ordinance of the Cabinet of Ministers of Ukraine 'On Exports of Electricity to the Republic of Belarus' dd. 27.05.2009 574-, Energorynok state enterprise shall provide for the electricity suppliers to enter into agreements on purchase of electricity in the wholesale energy market to be further supplied to the Republic of Belarus at the wholesale market price net of subsidies for compensation of losses related to electricity supplies at the regulated tariff. ??DTEK is the first private vertically-integrated power company in Ukraine. It is part of the financial and industrial group System Capital Management (SCM). The enterprises of DTEK build up an efficient operational chain of coal production and preparation, electricity generation and distribution.??The coal business of DTEK includes Pavlogradugol (consisting of ten coal mines), Komsomolets Donbassa Mine and five preparation plants. According to operational results for 9 months 2010, the Company's share in the Ukrainian coal mining industry was 25.2%.??The power generation business of DTEK is represented by Vostokenergo and the associated Dniproenergo Company, where DTEK owns 47.55%. According to operational results for 9 months 2010, the combined share of Vostokenergo and Dniproenergo in total power generation of Ukraine was 25.8%.??Service-Invest, PES Energougol and the associated Donetskoblenergo Company, where DTEK owns 30%, represent the electricity sales and supply business of DTEK. Their combined share of electricity purchase in SE Energorynok in 9 months 2010 made 14,2%.??DTEK is part of the financial and industrial group System Capital Management (SCM) owned by Rinat Akhmetov, the richest Ukrainian business oligarch.

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