Retrospective reduction “green” tariff will cause a Domino effect in the economy of Ukraine, – Baskov

Ретроспективное снижение "зеленого" тарифа вызовет эффект домино в экономике Украины, – Баськов

Head of sustainable development at Baker Tilly Alexander Baskov convinced that the retrospective reduction “green” tariff may cause a Domino effect in the economy and lead to default.

The expert reminded that the “green” tariff in Ukraine has introduced to attract investment in the development of renewable energy sources (RES), in particular, for the construction of solar and wind power. And the government ensured its permanence by 2030. In the present time are heard statements about the need for a retrospective reduction.

“Today we have a situation, when the question of the size of the green rate has reached its climax: it’s not just reduce, and reduce the “backdating” for 3 years, that is, retrospectively”, – wrote Baskov.

In his opinion, this will have negative consequences for Ukraine. The expert stressed that the retrospective reduction “green” tariff will be a bad signal to investors and can cause a Domino effect in the economy.

“Retrospective reduction of the green tariff will actually lead to cheaper electricity for 5 kopecks. Critical whether this amount is for the end user? You obviously don’t. However, the reduction rate for the investor can cause a Domino effect derail the banking system and cause a default in the country”, – said Bashkov.

In addition, he recalled the experience of several European countries, which retrospectively reduced the “green” tariff, so that they suffered considerable losses by paying compensation to investors.

“Example Romania, Spain and Italy, which did a retrospective decrease of the green tariff. This led, first, to a number of lawsuits in international arbitration. Radical changes in the regulatory framework entails state liability for breach of its investment obligations. As a consequence, the governments have millions of dollars in losses to compensate investors. And secondly, and most importantly, such a step virtually destroyed the industry of renewable energy sources, which can not recover in the last 2-3 years due to the loss of confidence of investors”, – said Baskov

Earlier, the banker of the Department of electricity of the European Bank for reconstruction and development (EBRD) Olga Eremina said that the retrospective revision of the “green tariff” will be detrimental to Ukraine, as the country will pay for claims in international courts much more than they want to save the initiators of this decision, and will scare away foreign investors.

The Ambassador of Norway in Ukraine OLE Horpestad previously said that investors stable conditions for investments are fundamental, and they will negatively react to a retrospective viewing of “green tariff”.

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