It seems our officials' habit of working "by schemes" is ineradicable. Last week, Ukraine tried to launch yet another scheme. This time, it was an electrical one.
Technically, this is possible, as the energy system we inherited from the former USSR hasn't been significantly modernized since. This means that Ukraine still shares a common energy system with Russia. However, in recent years, a zero-flow regime has been maintained in this area. Significant imports from Russia were out of the question: Ukrainian power generation generated an excess of electricity, which was exported to neighboring countries, including the European Union.
However, the aggression in Donbas turned the situation upside down. Military operations, which led to the shutdown and seizure of coal mining facilities by militants, and the targeted destruction of energy infrastructure, railways, and bridges by saboteurs, caused a coal shortage and, as a result, a drop in electricity production at Ukrainian thermal power plants. The power grid experienced an electricity shortage. This meant officials had an opportunity to profit from this. This time, by importing electricity. Especially since such schemes have been known since the 1990s.
No sooner had President Poroshenko signed the document authorizing (if necessary) the import of electricity from Russia than a contender immediately emerged. It was the little-known Energomerezha Holding Company, which immediately received permission to import "Russian" electricity, and in enormous quantities.
Officials surprisingly quickly reviewed the letter from the ChAO and issued a profound conclusion that they "are not opposed to importing electricity from the Unified Energy System of Russia with a capacity of up to 1500 MW." (This is roughly the consumption of Kyiv, or more than the entire Luhansk region consumed before the war.)
Moreover, the letter was signed on November 14th, authorizing exports as early as the 15th. Naturally, this wasn't done for profit, but simply "given that, given the decreasing ambient temperature and reduced coal supplies... a shortage of generating capacity is expected in the unified energy system of Ukraine."
The fact that the Energomerezha company, which received the right to import electricity from the Russian Federation, had not conducted any business activity for the previous two years, and this year had distinguished itself only by changing its name, did not bother anyone.
Nor is the fact that its director, Dmitry Kryuchkov, who had numerous run-ins with the law due to repeated (and not always unsuccessful) attempts to "squeeze" property, was never involved in imports. However, he is remembered (along with his brother Leonid) for his persistent efforts to gain control of energy construction and design organizations: the Kryuchkov brothers successfully "squeezed" (and in the process practically destroyed) the Rivne Nuclear Power Plant Construction Management OJSC and the Khmelnytsky Nuclear Power Plant Construction Management OJSC. This even led to masked men storming their offices.
At that time, the State Service for Combating Economic Crime of the Ministry of Internal Affairs of Ukraine melancholically stated that "a case of appropriation of someone else's property on an especially large scale through abuse of office, official forgery, and fictitious entrepreneurship by the Deputy Chairman of the Rivne Regional State Administration, Dmytro Kryuchkov, had been established." That was all they said.
Incidentally, the brothers ultimately sold their acquired shares in the Energoproekt Institute, the general designer of the Zaporizhzhia and South Ukraine Nuclear Power Plants, to Russians. They were also offered shares in companies involved in the completion of the Khmelnitsky and Rivne Nuclear Power Plants. Other notable achievements in real estate and banking are also worth mentioning. The internet is replete with descriptions of the Kryuchkovs' "exploits." But, apparently, someone was satisfied with this "business reputation." The younger brother, Leonid, is now strengthening the country's defense as deputy head of the Ukrspetsexport State Corporation. The older brother, meanwhile, is planning to enter the import business.
In general, the market could be congratulated on the appearance of yet another shell company a la RosUkrEnergo.
A logical question arises: why didn't the ultra-cautious and, after the prosecutor's attack, clearly afraid of his own shadow, Minister of Energy and Coal Industry Yuri Prodan block the inclusion of a clearly "shady" company in the scheme? Was everything decided at a higher level?
According to ZN.UA sources, the owner hosted Konstantin Grigorishin and Viktor Medvedchuk at one of the presidential dachas last weekend. The discussion centered on Russian electricity and coal supplies.
Considering that Mr. Grigorishin owns the Luhansk Energy Association (LEO), which supplies electricity to the region, the situation becomes even more intriguing. This is especially true given that, as of November 28, enterprises subordinate to the Ministry of Energy and Coal Industry—state-owned coal mining associations, power, and gas supply companies—will cease operations in the ATO zone. However, the order from the head of the energy and coal ministry, dated November 25, appeared on the official website precisely on November 27, when the new Verkhovna Rada of Ukraine accepted the resignation of the government in which Prodan served as minister.
The hasty issuance of the energy import "permit" raises a number of questions for the National Commission for State Regulation of Energy and Public Utilities. It (just as quickly) issued licenses for the supply of electricity at an unregulated rate not only to Energomerezha Holding Company PJSC but also to the newly formed Energomerezha-Export-Trade LLC. On November 20, the regulator received a license for the supply of up to 840 million kWh per year.
The founders of this small company, created literally the day before, were ChAO Holding Company Energomerezha and OOO Intek Energy (they each own 50%).
But no one at the regulatory body (NKREKU) was alarmed that a classic shell company would be operating in such a sensitive area.
With this level of importer verification, we can go far. For example, "Russian" installers are currently constructing several power lines in the Luhansk region to supply electricity from the Rostov region of Russia. This includes a 110 kW line to Krasnodon and then on to Luhansk. Work is also underway on a 500 kW power line from the city of Shakhty (Rostov region).
Essentially, this is 100% planned smuggling. However, with such excellent officials and a surprisingly accommodating state regulator, it's easy to imagine some shell company obtaining a license to supply electricity through these power lines. This would be enough to give at least the appearance of legality to the supplies...
Imports of Russian energy resources have long been a curse for Ukraine, a tool of blackmail, a mechanism for destroying our economy. However, the domestic political elite, with a tenacity worthy of better causes, regularly steps on the same rake. The most high-profile corruption scandals and personnel battles are occurring in the energy sector. It's hard to name a single energy minister, prime minister, or president who hasn't been hit by this rake.
The same Yanukovych "family," towards the end of the war, was very interested in electricity trade with foreign countries. Russia, too, has traditionally corrupted the Ukrainian government through energy intermediaries—the cases of the United Energy Systems of Ukraine (UESU), RosUkrEnergo, and Ukrgaz-Energo are still making headlines. Negotiations with the Russian Federation are always accompanied by the uncovering of schemes, resignations, trials, and prison terms.
Incidentally, today, when Naftogaz imports Russian gas at the highest prices in Europe (Gazprom offers Naftogaz $378 per thousand cubic meters, while the same Russian gas can be purchased on the EU market for fifty dollars less), not only are we failing to reduce our dependence on Russia for gas, but we're actually continuing to increase it: even before the onset of cold weather, the Ukrainian Ministry of Energy and Coal Industry managed to launch gas-fuel oil units at state-owned power plants, which cost almost three times more to operate than coal-fired units…
The energy corruption scandal is only just beginning to gain momentum. Deputy Minister Vadim Ulida, who signed the authorization letter, was fired on November 26th during a Cabinet meeting. According to eyewitnesses, the Prime Minister, without mincing words, declared right there at the cabinet meeting, "Fire him!"
It's clear that Ulida is the scapegoat in this case. Therefore, a non-rhetorical question arises: who is the true beneficiary of the money-laundering scheme being constructed through a new shell company headed by a figurehead? Who promoted Ulida and Prodan to top energy sector administrators, and why? How can such people be trusted with the keys to the country's energy security?! And how much longer will Ukraine's energy sector be associated with schemes, offshore companies, and shell companies?
Sergey Umansky, Zerkalo Nedeli, Ukraine
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