Electricity

Ukrainian electricity distribution companies (oblenergos) have, we believe, strong upside potential. This potential is currently obscured by two factors. One is heavy industry regulation; the other is their current “cost plus” tariff formation method. Both factors have produced unimpressive financial results. Combine this with low household electricity tariffs and a high level of electricity grid depreciation, and the need for two things becomes strikingly apparent - intensive modernization and industry reform.