OREANDA-NEWS. May 3, 2012. In 2011, DTEK invested more than UAH 1.3 billion in social and sustainable development. About UAH 330 million of the total amount was allocated for occupational safety programmes. More than UAH 980 million was channelled into environmental protection. The Company invested more than UAH 30 million in social partnership projects in the towns and cities of its operations. Costs for social assets maintenance in these regions amounted to UAH 46 million.

 In 2012, investment into the sustainable development of the Company and society is planned to go up significantly due to expansion of DTEK’s social partnership projects and new acquisitions.

 Aleksandr Tolkach, DTEK’s Director for External Affairs, said: “In 2012, DTEK plans to channel about UAH 60 million into social development of the regions of its operations and more than UAH 570 million into health and safety programmes. Social assets maintenance costs will increase sixfold to make about UAH 310 million. The comprehensive capital expenditure programme also provides for a significant growth in environmental protection costs. DTEK is a Ukrainian company that operates in most regions of the country and we are aware that the existence of DTEK’s business depends on the development of these regions and welfare of our employees and their families.”

ADDITIONAL INFORMATION

2011 milestones of DTEK’s sustainable development:
DTEK signed the Declaration on Responsible Business Partnership initiated by the Centre for Corporate Social Responsibility Development with the support of the Royal Norwegian Embassy in Ukraine. DTEK became the first industrial company in Ukraine to support the initiative (January).
DTEK, the Federation of Canadian Municipalities and municipalities of three towns in Dnipropetrovsk Region — Pavlograd, Ternivka and Pershotravensk — signed the Memorandum of Cooperation within the framework of the project “Local Economic Development of Ukraine’s cities”. The memorandum focuses on comprehensive improvement of the economic situation in Western Donbass region (February).
DTEK, Pavlograd city council and USAID Municipal Heating Reform Project signed Memorandum of Cooperation to improve the heat supply system and energy efficiency (February).
DTEK became member of the Centre for Corporate Social Responsibility Development (May).
DTEK rolled out its social partnership programmes in Western Ukraine. Nineteen towns and four district centres in 8 regions of Ukraine are parties to the Declaration.
DTEK, the City Council of Dnipropetrovsk and the USAID Municipal Heating Reform Project signed a Memorandum of Cooperation in improvement of the heating system and energy efficiency of Dnipropetrovsk (July).
DTEK was the first Ukrainian company to join CSR Europe, the largest European business network comprising more than 70 multinational corporations. CSR Europe’s members are actively engaged in development of corporate social responsibility in Europe and integration of the CSR principles into their development strategies (July).
DTEK, Kyiv City State Administration and USAID Municipal Heating Reform Project signed a Memorandum of Cooperation in improvement of the heating system and energy efficiency of Kyiv (August).
DTEK, the Ministry of Health Protection of Ukraine, the National Academy of Medical Science of Ukraine, Rinat Akhmetov’s Foundation for Development of Ukraine and MTS Ukraine signed the Memorandum of Understanding on development of the national telemedicine network (September).
DTEK topped the Ukrainian Business Transparency and Accountability Index rating published by the Centre for Corporate Social Responsibility Development in accordance with the methodology of Beyond Business (September).
DTEK won the first national award HR-BRAND Ukraine-2011. The corporate university, DTEK Academy, won gold in the category “Ukraine”, and Generation of DTEK project on cooperation with universities took silver in the category “Regions” (November).
DTEK's Project Innovation from the Depth on introduction of heat pumps at Blagodatnaya Mine of DTEK Pavlogradugol was announced the best energy efficiency project at Green Awards Ukraine 2011 (December).


Social partnership

 In 2011, DTEK designed its Social Development Concept for 2012 and 2013 determining the Company’s strategic tasks and ways to attain them. The key areas for social investments in 2012-2013 include energy efficiency in housing and public utilities, healthcare, development of socially significant infrastructure and business environment, support of education, culture and sports.

 DTEK’s main principle is systematic social partnership between private business, local authorities and the society. DTEK has moved from unstructured charity efforts to premeditated long-term social investments using up-to date governance technologies. In 2011, Lviv, Burshtyn, Ladyzhyn and Dobrotvor joined the Social Partnership Declaration. The Declaration has been signed by 19 towns and 4 districts.

 In 2011, together with Rinat Akhmetov’s Foundation for Development of Ukraine DTEK joined the Telemedicine project to improve the quality of medical services in the regions of its operations. As a result, four hospitals of Lviv and one of Burshtyn were connected to the nationwide medical communication network. Now, doctors and patients will be able to promptly consult Ukrainian leading medical practitioners via video conferencing. In 2011and 2012, UAH 3.7 million will be invested in the project. In 2012, it is planned to complete the project in Lviv and Burshtyn and roll it out in Pavlograd (Dnipropetrovsk region), Rovenky, Sverdlovsk (Lugansk region), Dobropillia, Kirovske (Donetsk region).

 In 2012, the Company also declared the launch of a project for Improvement of Miners’ Health and Safety in Eastern Ukraine. Metinvest Holding and UN Development Programme in Ukraine participate in the project together with DTEK. Rovenky, Sverdlovsk and Krasnodon (Lugansk region) will be the platform for the project implementation. In future, DTEK plans to implement similar projects in all regions of its operations. The first stage of the project will last three months, from April to June 2012. The project team will use this time to assess the miners’ health and safety risks and investigate the need for healthcare improvement. As a result, a detailed action plan will be developed to be implemented at the second stage, by 2014. DTEK’s investments in the first stage were UAH 320 thousand. The investments to the second stage will amount to UAH 5 million in 2012 alone.

 DTEK continues the cooperation with USAID Municipal Heating Reform Project (MHR project). In 2011, DTEK, MHR project and the Municipal Councils of Pavlograd, Kyiv and Dnipropetrovsk signed a Memorandum of Cooperation to improve the heat supply systems and the energy efficiency of the cities. The trilateral cooperation makes it possible to combine the expertise of MHR project, the organizational and investment potential of DTEK and the support of the local authorities to reform the heat supply systems in the participating cities. The cities contribute to the USAID project in the following areas: training specialists and drawing up municipal energy plans; conducting energy audits of standard buildings and heat supply systems; carrying out research and implementing standard projects on installation of heat metering and control systems; establishing associations of house co-owners; implementing demo projects on energy efficiency under joint financing conditions, etc. DTEK provides expert and financial support within this project.

 In 2011, the energy audit of heat supply systems in Kyiv, Dnipropetrovsk, Pavlograd, Kurakhovo and Burshtyn was carried out, municipal energy plans on heating facilities upgrade were developed. In 2012, UAH 20 million will be spent on their implementation.

 Furthermore, the Company is implementing large projects, such as Clean Energy: Partnership for the Future of Dnipropetrovsk Region, Local Economic Development of Ukrainian Cities and Towns, Engaging International Experts for Technical Assistance in Development of DTEK’s Regions of Operations.

 DTEK kept promoting the corporate social responsibility standards in Ukraine in 2011. The Company continued its membership in UN Global Compact in Ukraine, actively participated in the work of the Coordinating Committee of Verkhovna Rada of Ukraine on development of the draft National Concept of the Business Social Responsibility Development in Ukraine. In 2011, DTEK chaired the Environmental Committee within UN Global Compact.

 DTEK’s efforts to promote sustainable development in 2010 and 2011 have been recognized and the Company topped the Ukrainian Companies Transparency and Accountability Index, published by the Corporate Social Responsibility Development Centre under the international methodology of Beyond Business company. The nation-wide research covered over 100 largest Ukrainian companies. DTEK was awarded the highest rating among Ukrainian participants — 80% — while the average transparency index of national participants was 59.8%.

Safety

 Health and life of its employees is the priority for DTEK. The management of the Company and the Shareholder, Mr Rinat Akhmetov, personally control the compliance with the international safety standards. DTEK has established Health, Safety and Environment Committees. In 2011, the Company continued implementation of the PPE Corporate Standard project, intended to provide the company’s production personnel with modern, reliable and high-quality personal protection equipment. It will help reduce the impact of the negative production factors upon the employees and improve operational safety. The total investment into the project in 2011 amounted to about UAH 18 m.

 DTEK enterprises have the internal audit system in place, including behavioural audit. All incidents including those that could have resulted in potential emergencies and accidents are internally investigated.   

 The safety management systems of DTEK’s main coal assets: DTEK Pavlogradugol and DTEK Mine Komsomolets Donbassa have been successfully certified for their conformity with OHSAS 18001:2007. Similar procedures are being introduced at the newly aquired coal assets: DTEK Dobropolyeugol, DTEK Rovenkyanthracite, DTEK Sverdlovanthracite.

 Introduction of OHSAS 18001:2007 procedures helps reduce industrial injuries rate by 50% within several years (in 2006, there were 873 general injuries registered in the coal sector, in 2011 their number dropped to 431).

 Coal mining and processing companies have resumed activities of occupational safety officers as one of additional elements of control and management. Heads and specialists of the enterprises were trained in the internal corporate safety standards.

Environmental Protection

 DTEK is an environmentally responsible company, whose development strategy presupposes improved environmental safety, and growth of the assets capitalization through reliable and harmless operations. Environmental protection activities and maintaining the environmental balance are an integral part of DTEK’s successful way of conducting a business. The Company strives to prevent and minimize the impact upon the environment at all stages of the production process from coal mining and processing to electricity generation and transmission.

 Organizational changes in the Company’s environmental protection activity:

Industrial enterprises of DTEK continue improving the environmental protection management systems introduced in 2010. In late 2011, compliance audits were successfully carried out, during which international auditors of Moody International confirmed that the environmental management systems (EMS) of 14 DTEK enterprises conform to ISO 14001:2004.

In 2011, Dniproenergo successfully passed the certification audit to confirm compliance of the environmental management system to ISO 14001:2004.

Since March 2011, Kyivenergo has been actively designing and introducing the environmental management system. The company prepared its environmental strategy, approved the new structure of the environmental function, set up environmental protection units in the organizational charts of the branches. The company drafted 12 provisions that reflect the key EMS requirements, identified its environmental aspects and is training its personnel. The certification audit is scheduled for 2012.   

 To meet Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from large combustion plants, the Company initiated measures to help draft the State Programme for Reduction of Pollutants Emissions from Ukrainian TPPs and CHPPs and raise finance for it.  

 To reduce sulphur dioxide and nitrogen oxide emissions from Skhidenergo TPPs, Vattenfall (Germany) and NOVERTEC (France) prepared process regulations for deSOx and deNOx facilities construction at Zuevskaya and Kurakhovskaya TPPs, ad are preparing the Feasibility Studies.

 Throughout the year Kurakhovskaya TPP continued the retrofit of the electric precipitator of unit 8. The equipment start-up is scheduled for 2012. The retrofit will reduce the dust emissions into the air from 2,449 mg/m3 to 50 mg/m3 to comply with Ukrainian and international environmental requirements.

 Luganskaya TPP developed design documentation for installation of gas treatment equipment at power unit 10. Equipment installation is in progress, start-up is scheduled for 2012. After to the retrofit the dust emissions are expected to go down from 2,526 mg/m3 to 257 mg/m3.

 Flue Gas Monitoring System introduced at Zuyevskaya TPP in 2011 enabled continuous control over the air emissions of power units 1 and 2.

 In order to reduce atmospheric emissions of solid particles in course of heat generation, the boiler house of block 2 of Stepnaya mine of DTEK Pavlogradugol was fitted with a cyclofilter, a new advanced type of air treatment equipment. Flue gas treatment effectiveness reached 99%. Suspended particles content was reduced from 284 mg/m3 to 10 mg/m3, which is in accordance with the regulatory requirements.

 To cut back operation of solid-fuelled boilers by means of mine methane utilization, KE-25-14C boiler of the boiler house of block 2 of Stepnaya mine was refitted to run on mine gas. Running on gas the boiler house will save up to 6 thousand tonnes of coal per year.

 The investment project on reequipment of gas treatment facilities of the boiler house of Kurakhovskaya CEP has reached the final stage. The company has prepared the project documentation, obtained the required expert opinions, purchased and installed the equipment. The project implementation is expected to result in reduction of pollutants emissions. Coal dust and carbon monoxide emission will decrease by 87% (from 4.136 to 0.521 tonnes per year) and 83% (from 1.020 to 0.170 tonnes per year) respectively.

 All assets of the Company take measures to minimize the impact from their operations on water and land resources..

Disclaimer: This document may contain forward-looking statements related to planned measures or future financial indicators of DTEK. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” or the negatives of these terms or variations of them and similar expressions are intended to identify such forward-looking statements. Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We undertake no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which are pertinent only as of the date of this press release. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties. Such risks include concerns over the general economic status, environment and risks associated with the doing business in Ukraine, significant technological and environmental changes in our sector, as well as many other risks specifically applicable to DTEK and its business.