Obstacles to Energy Reform in Ukraine

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Obstacles to Energy Reform in Ukraine

On July 28, the U.S.-Ukraine Foundation hosted a discussion of Ukraine’s prominent energy experts on obstacles to energy reform implementation in Ukraine moderated by Friends of Ukraine Network’s Economic Task Force Vice-Chair Edward Chow.  

Since independence, every Ukrainian government repeatedly promised energy reforms that have never fully implemented or achieved their intended results. Regardless of many right steps, Ukraine’s energy sector still suffers from the post-Soviet legacy of state control and state capture by private interests, overregulation, and monopolization. The desire of authorities to control energy manually led to massive underinvestment and pervasive corruption damaging Ukraine’s economic competitiveness and undermining ample energy production potential. Naturally, the Ukrainian public is suspicious of any changes and sees past reforms as synonymous with higher prices, poor energy services, and benefits for the politically well-connected. 

The panel including Oleksandr Dombrovsky, Board Chairman of NGO Global 100 RE Ukraine and Former Head of the Parliamentary Energy Committee, Sergiy Maslichenko, former EBRD Associate Director on Energy Saving and Climate Change and Deputy Minister of Energy and Environment of Ukraine, Olena Pavlenko, President of the Ukrainian think-tank DiXi Group, Volodymyr Omelchenko, Energy Program Director of the Ukrainian Razumkov Center and Andrian Prokip, Energy Expert at the Ukrainian Institute for the Future, agreed that weak capacity of Energy Ministry to implement reforms combined with vested interests of oligarchs benefitting from status quo and continued Russia’s efforts on undermining Ukraine through influence on Ukrainian policymakers at all levels are among the main reasons for the slow pace of reforms. Strengthening judicial and antimonopoly capacity is also crucial for the success of Ukraine’s successful energy transformation.  

Reforms are complex, painful, and costly, and Ukraine will not be able to complete this path alone. Western partnerships and assistance with positive conditionality stimulating transformation are needed to help Ukraine advance its goals and contribute to strengthening overall European energy security. 

Watch the full recording of the webinar HERE.