Passing Energy Bills, Ukrainian MPs Clear Path for New EU Loan

 

The first bill will allow more companies to compete in the local distribution market - at present controlled by regional monopolies. The second measure creates an independent electricity commission responsible for setting power tariffs.

 

Ukraine must adopt a series of reforms to secure tranches of aid money from its various international donors, which include the EU and the International Monetary Fund, as part of a phased $40 billion aid package.

 

After nearly a year-long wait, Ukraine finally secured the disbursement of $1 billion in more IMF aid last week. But doubts persist about whether Ukraine has the political will to modernise its economy and tackle entrenched corruption.

 

"The bill has a great role in the development of the energy market and the establishment of an independent and professional regulatory agency in the energy market," said a statement from a special group of advisers to Prime Minister Volodymyr Groysman that focuses on reforms.

 

"We believe that the energy regulator should be a truly independent body and arbitrator for the energy market. It has to defend the interests of consumers, to create fair conditions for suppliers and producers. In the future, it is important to demonstrate in practice the independence of this institution."

 

Corruption has long plagued Ukraine's energy sector at a cost to the public purse. The EU has linked the disbursement of new aid to passing the two bills.

 

The law to create the commission was passed at the final reading. The law on regulating the energy market was passed at the first reading and needs to be approved a second time.

 

Once implemented, the legislative changes will also help pave the way for the sale of six regional energy companies that are slated for privatisation.

 

However, two prominent lawmakers in President Petro Poroshenko's party said the legislation wasn't strong enough to protect the new commission from political interference.

 

The president has the power to nominate two of the five representatives, who will in turn choose members of the commission. The other representatives are nominated by the prime minister and parliament. The president also has the power to veto prospective members.

 

"The President will retain influence over the institution, which not only sets tariffs but also singles out the oligarchs who would benefit from them," MP Serhiy Leshchenko wrote on Facebook (FB). 

(By Natalia Zinets and Alexei Kalmykov,Writing by Matthias Williams)