OREANDA-NEWS. July 16, 2010. DTEK, Ukraine’s leading private sector fuel and energy company, announces that it will invest up to UAH500 million (USD 63 million) into two state-owned companies: Rovenkianthracite and Sverdlovanthracite. DTEK’s investment proposals were agreed by the Ministry of Coal Industry of Ukraine and the resulting Investment Agreement will be valid for five years with the option to extend at the end of this period.

Under the terms of the agreement, by the end of 2010, DTEK will finance the re-equipment, upgrade and development projects of both companies, under the terms of the standard state-private sector partnership mechanism. DTEK will invest about UAH300m and UAH200m into Rovenkianthracite SE and Sverdlovanthracite SE respectively. 

The proceeds of DTEK’s injection will be used for the companies’ capital construction projects and for breaking and tunneling equipment, which will enable the enterprises to prepare more than 30 new longwalls by the end of 2010. DTEK, in partnership with the Ukrainian government, will control the use of the funds provided.

It is planned that the annual output of the state-owned enterprises will increase by three million tones, in total, by 2014.

Commenting, DTEK’s CEO Maxim Timchenko said:

“Cooperation with two largest state companies, both producers of anthracite coal, is one of DTEK’s strategic priorities and an excellent example of where public-private partnerships can benefit the coal industry more widely.  Furthermore, state companies now have a greater degree of reassurance through their gaining of regular buyer of their products, which will generate regular and stable levels of income, thereby enabling them to continue their development.

 “In turn, collaboration with Rovenkianthracite SE and Sverdlovanthracite SE will help to cover DTEK’s generating companies’ anthracite coal requirement, meaning that mutually beneficial synergies can be achieved.”

Mr. Timchenko added:

 “This cooperation agreement is not limited to investment projects.  In May 2010, Rovenki and Sverdlovsk’s local authorities joined DTEK’s Social Partnership Declaration, which enables the Company’s participation in the ongoing development of both towns. As a part of the Declaration, DTEK, along with Chemonics International Inc. and USAID, has begun the implementation of the Local Investment and National Competitiveness Project (LINC) in those towns.

 “This project aims to create comfortable living conditions for the towns’ population, along with attracting additional investment into the towns and their local businesses.”