Rosenergoatom: key players of the electric power market have developed a debt settlement program for default suppliers in the North Caucasus

During the meeting of the ‘NP Market Council’ Association Supervision Board featuring Yu. V. Manevich representing the Russian Ministry of Energy, a special program was reviewed to facilitate proper settlements for the wholesale market of default suppliers in the North Caucasus, the Republic of Kalmykia, and the Republic of Tuva.

As a comprehensive solution to the major problem of growing debts at the wholesale market, the meeting participants have agreed on the following:

  • To restructure the debts accumulated by the default suppliers in the North Caucasus by 1/1/2020. The restructuring is going to last for 4-5 years and is subject to payment at a key rate.
  • To settle all payments via an authorized lending institution, including the financial support of the ‘Rosseti’ company.
  • Additionally, starting July 2020, support has to be facilitated for the default suppliers to repay their debts to the generation companies, which also features help from ‘Rosseti’.
  • The important pre-conditions for the restructuring was to subsequently revoke the market entity licenses from two default suppliers – AO ‘Sevkavenergo’ and PAO ‘Dagestan Energy Supply’ starting April and July 2020 respectively to avoid any further debt increase from these companies.

The Rosenergoatom Joint-Stock Company, the Russian Ministry of Energy, the ‘NP Market Council’ Association, the ‘Council of Power Producers’ Association, and the PAO ‘Rosseti’ have worked through the entire year 2019 to elaborate a joint solution.

‘The problem of the default suppliers failing to pay for the electric power consumed is one of the most challenging ones since the wholesale market was launched. The program we have established is a crucial step to improve the debt situation at the electric power wholesale market, which is especially important taking into account the licensing of the activities for the default suppliers coming up in July 2020’, Alexander Khvalko, the deputy CEO and the sales director of the Rosenergoatom Joint-Stock Company.

As of now, the total amount the default suppliers in the North Caucasus owe to the Rosenergoatom Joint-Stock Company is 11.2 billion rubles. In the meantime, their debts are proportionate to the Rosenergoatom’s share in the electric power wholesale market supply, which accounts for around 20% of the total debt of all default suppliers in the North Caucasian Federal District.

‘The decisions we made will not affect the residents of the North Caucasus paying their utilities bills timely; however, these will help resolve the critical problem of accumulating debts to the electric power producers’, Alexander Khvalko stressed.

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