By Swann Bigot, legal expert and consultant in international affairs, for Eurasia Network – October 4, 2019

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Solar panels – Photo credit : Pexels.com

The German company De Raj Group AG announced on September 26 the signature of an agreement with the Ukrainian STC Energy LLC.

According to this agreement the companies will build together six solar power stations across the Kiev oblast and will supply electricity to the state-owned “Guaranteed Buyer”. These photovoltaic power plants will have a total production capacity of 88.371 MW.

This investment takes place in Ukraine along with other ongoing negotiations in Hungary, India and South East Asia that will further fuel the expansion strategy of De Raj Group AG into renewable energy projects in Europe and Asia.

Mr. Vaidyanathan Nateshan, the CEO of De Raj Group AG, commented in the press release : “these plants in Ukraine are a significant step forward in the development of our strategy to build a green investments portfolio as a growth driver.”

STC Energy LLC is one of the largest renewable energy developers in Ukraine. The company has strong positions in the renewable energy industry. STC Energy develops, builds, operates and maintains renewable energies projects, for itself and for third parties.

Ukraine supports the development of renewable energy sources. The number of solar power projects will continue growing thanks to the local feed-in-tariff which helps investors to receive a relatively fast return on investment with moderate risk.

Incorporated in Germany in January 2015 and based in the city of Koeln, De Raj Group AG develops renewable and conventional energy projects. The company owns, operates, and acquires contracted renewable and conventional generation and thermal infrastructure assets. The company is listed on the EU-regulated Vienna Stock Exchange (IPO in February 2018). The shares of the De Raj Group have been traded since March 23, 2018 in the Open Market in Frankfurt / Main and in XETRA.

Ukraine has been reforming its energy sector since 2009 by adopting a new legislation on renewable energy.  The country joined the European Energy Community in February 2011 and set in October 2014 the goal to increase renewable energy share in the national power mix to 11% by 2020 while the Energy Strategy of Ukraine until 2035, adopted in 2017, set the target of 25% of renewable energy share by 2035.

The election of the new President Volodymyr Zelensky in April 2019 did not change the priority towards the growth of the renewable energy capacities in the country.

Ukraine benefits from good wind and solar exposure and wants to reduce its dependence on imported gas to generate heat and electricity. At the same time, the nuclear power infrastructure is aging and coal power plants produce a lot of pollution, while technological innovation has significantly reduced the cost of solar power and increased their life span.

Read also : EBRD to provide a € 18 million loan to build three solar farms in Ukraine

Therefore, dozens of solar power stations have been built in Ukraine over the past five years. Investors and businessmen find in the country attractive conditions such as affordable and large lands, cheap equipment and a skilled workforce. The legislation secures financial incentives for them. Indeed, the guaranteed feed-in-tariff, secured until 2030 after a reform voted last April, is a source of stable cash flow with moderate risk for investors whose infrastructure generates zero emission electricity.

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© Copyright 2019 – Swann Bigot, legal expert and consultant in international affairs.

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