TIU Canada de­vel­ops so­lar en­ergy, an­other sig­nal of bet­ter in­vest­ment cli­mate

Kyiv Post - - Business Focus - BY NATALIA DATSKEVYCH DATSKEVYCH@KYIVPOST.COM

Amid all the gloom, at least one for­eign in­vestor sees some bright prospects for its busi­ness in Ukraine.

Sched­ul­ing the open­ing its first 10.7 megawatt so­lar power plant in the city of Nikopol in Dnipropetro­vsk Oblast for Jan­uary, TIU Canada gave an­other pos­i­tive sign that the in­vest­ment cli­mate in Ukraine has started to im­prove again since Rus­sia launched its war on the coun­try four years ago.

With the out­break of the war in Don­bas, for­eign com­pa­nies have nat­u­rally had many con­cerns about com­ing to the coun­try.

“When we first ar­rived in 2016 there was a lot of skep­ti­cism and not that many western firms were even look­ing at Ukraine,” Hani Tabsh, CEO of TIU Canada, told the Kyiv Post in a re­cent in­ter­view.

“Now, over the last year-and-a-half that at­ti­tude has slowly mor­phed into — 'okay, there’re still some things to get worked out, but it’s start­ing to be­come more com­fort­able.'”

Cur­rently Tabsh does not see a se­ri­ous threat from Rus­sia.

“It feels like there is no con­flict at all… It’s a very lo­cal­ized thing, which is im­por­tant to rec­og­nize, but from (the) in­vestor per­spec­tive you have to keep an eye on it,” he said.

The sooner the bet­ter

Over the past four years, re­new­ables in Ukraine have be­come one of the most rapidly de­vel­op­ing sec­tors of the econ­omy. Part of the rea­son is Ukraine’s de­sire to be­come as en­ergy in­de­pen­dent as pos­si­ble from Rus­sia, which was pre­vi­ously the coun­try’s big­gest gas sup­plier.

Ukraine has also set an at­trac­tive green tar­iff for sales of power gen­er­ated from re­new­ables, and there is a high level of trans­parency for such busi­ness ac­tiv­ity, mak­ing it less sus­cep­ti­ble to cor­rup­tion.

Since 2015, the re­new­able en­ergy sec­tor has seen gen­er­at­ing ca­pac­ity rise by 766 megawatts, to reach 1.7 gi­gawatts by the end of the first half of this year, ac­cord­ing to the State Agency on En­ergy Ef­fi­ciency and En­ergy Sav­ing, or SAEE.

Over the same pe­riod more than 740 mil­lion eu­ros of in­vest­ment, both for­eign and do­mes­tic, have been made in the sec­tor, ac­cord­ing to the SAEE.

Just like re­new­ables, Ukraine now has a gen­er­ally pos­i­tive, but still very slow, trend of in­creas­ing for­eign direct in­vest­ments. From Jan­uary to Au­gust FDI was $1.4 bil­lion, a mod­est $200 mil­lion more than over the same pe­riod in 2017, ac­cord­ing to the Na­tional Bank of Ukraine.

Among re­new­ables the so­lar busi­ness is one of the most pop­u­lar, as it is eas­ier to get started and re­quires less ini­tial data than other types, like wind or bio­gas.

“You don’t have to do a one-year wind study, plus the con­struc­tion time is a lot faster,” said Tabsh.

In 2009 there was not a sin­gle so­lar power plant in Ukraine; in com­par­i­son, by the end of 2017 some 184 so­lar projects were com­pleted, pro­duc­ing some 742 megawatts of elec­tric­ity al­to­gether, ac­cord­ing to the Ukrainian As­so­ci­a­tion of Re­new­able En­ergy, or UARE.

The trend is per­sist­ing in 2018: The re­new­able sec­tor is ex­pect­ing to see the in­stal­la­tion of an­other gi­gawatt of “green” ca­pac­ity — 600 megawatts of so­lar, 300 megawatts of wind, and 50–100 megawatts of bioen­ergy, ac­cord­ing to Irina Kry­mus, an ex­pert at the UARE.

How­ever, de­spite all the progress in re­new­ables seen in Ukraine, the coun­try is still far from se­cur­ing its en­ergy in­de­pen­dence.

Un­like Ger­many, where re­new­ables pro­duce 40 per­cent of the coun­try’s elec­tric­ity, Ukrainian re­new­ables ac­counted for only 1.2 per­cent of the elec­tric­ity the coun­try gen­er­ated in 2017, or only 1,896 mil­lion kilo­watts, ac­cord­ing to en­ergy ex­pert An­drey Pere­ver­taev.

That num­ber is dwarfed by the out­put of nu­clear power plants, and coal- and gas-fired power plants, which gen­er­ated 91 per­cent of all of the elec­tric­ity in Ukraine, or some 141,000 mil­lion kilo­watts over the same pe­riod.

So­lar port­fo­lio

Like the other ma­jor play­ers on the Ukrainian re­new­able mar­ket, TIU Canada doesn’t want to stop at a sin­gle so­lar power plant in Nikopol.

It plans to build five new so­lar power plants in Ukraine, in­vest­ing 94 mil­lion eu­ros, ac­cord­ing to Ivan Bachyn­sky, the com­pany’s com­mu­ni­ca­tions rep­re­sen­ta­tive.

“We want to have a port­fo­lio of 50–100 megawatts if not larger as we grow over the next year,” added Tabsh.

Since Myko­laiv Oblast has one of the best lo­ca­tions for so­lar power gen­er­a­tion in Ukraine, an­other so­lar plant near the vil­lage of Ka­lynivka is al­ready un­der con­struc­tion. It will cover 20.2 hectares with a ca­pac­ity of 13.5 megawatts.

The plant will help re­duce Ukraine’s car­bon diox­ide emis­sions by 18,212 tons per year, ac­cord­ing to Bachyn­sky.

Ac­cord­ing to Tabsh, the com­pany is in the fi­nal stage of ne­go­ti­a­tions and com­plet­ing due dili­gence for two ad­di­tional so­lar projects in that same re­gion.

“And as soon as we’ve got those closed and meet all the fi­nal re­quire­ments, we’re go­ing to start con­struct­ing them this fall,” he said.

His­toric agree­ment

TIU Canada doesn’t just have busi­ness ties with Ukraine — there is much broader in­ter­est in cul­tural ex­changes at the com­pany.

For in­stance, on Sept. 10, two may­ors — Nikopol’s An­driy Fisak and Ger­ald Aal­bers of the Cana­dian city of Lloy­d­min­ster — signed a his­toric agree­ment be­tween their two cities.

The Cana­dian in­vest­ments in Nikopol were the mo­ti­va­tion for sign­ing this first ma­jor non-mil­i­tary co­op­er­a­tion agree­ment be­tween Canada and Ukraine in 35 years.

“We’re not happy sim­ply to put money into a com­mu­nity, walk away, and just col­lect in­come that comes from that type of in­vest­ment,” said Tabsh. “Our com­pany wants to be ac­tively in­volved within the com­mu­ni­ties in which we’re in­vest­ing.”

Since Lloy­d­min­ster and Nikopol have some sim­i­lar­i­ties in terms of in­dus­tries and pop­u­la­tion size, the co­op­er­a­tion could pro­duce real growth in trade as well as op­por­tu­ni­ties in ed­u­ca­tion, art, and sports be­tween them, ac­cord­ing to Tabsh.

“There will be cul­tural ex­changes hope­fully be­tween the two cities af­ter the meet­ing of the two may­ors, and we’re look­ing to see how it will de­velop and will sup­port it as quickly as we can,” said Tabsh.

TIU Canada's Chief Oper­at­ing Of­fi­cer Hani Tabsh speaks with the Kyiv Post on Sept.14 about his com­pany's op­er­a­tions and fu­ture plans in Ukraine. (Volodymyr Petrov)

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