Politics 2024-02-15T04:54:05+02:00
Ukrainian news
Kropachev: let's unite to create a new Ukrainian energy system

Kropachev: let's unite to create a new Ukrainian energy system


Published in edition EU Reporter.

"Russian energy blackmail is a genocide of the civilian population of Ukraine and all of Europe. Putin is forced to take these steps, because he is losing, his army is very weak and he has no more arguments. Ukraine will overcome all difficulties with dignity, survive, and the restart of its energy system will become a unique experience for the whole world,” says Ukrainian businessman and philanthropist Vitaliy Kropachev (pictured), with whom we talked about the situation in Ukraine, the war and energy.

In the afternoon, Kyiv, the largest city and capital of Ukraine, slowly sinks into darkness. Houses, occasionally illuminated by the headlights of cars, freeze in anticipation of the return of life. The heavy, depressing atmosphere is complemented by the howling of a siren, which announces an approaching air attack. Somewhere in the Caspian Sea, several missiles were fired from a Russian warship, most likely heading for Ukrainian energy infrastructure. People walking down the street have obviously learned to live with the circumstances. Without panic and stress, as according to a pre-learned protocol, everyone is going to safe places. We also onward to the underground parking lot where for the next 40 minutes we will talk with Ukrainian businessman Vitaliy Kropachev, who has a lot of Ukrainian energy assets in his portfolio.

Getting inside the Kyiv houses dark from the street, you understand that you were mistaken and life did not leave Kyiv. Despite the lack of electricity, heat and water, people do not lose faith in the future. “There is no place for dispersion, no time to sag and feel sorry for yourself. The movement is life. Now we are a single organism that fights the disease.” - comments on my assessment of what he saw Kropachev.

Are you comparing Russian aggression against Ukraine with a disease?

“I consider every Ukrainian as a single organism from a ZSU soldier in the trenches on the front line, a coal miner 50 kilometers from the front line, a businessman, a doctor, the President, up to the mother who took her children abroad. We cannot doubt, we have no choice but to fight for our country, freedom and future. Yes, the Russian world is a disease that we have been ill for a long time and now we have a chance to recover from it. - Vitaly confidently reports.

From the moment Russia began massive bombing of the Ukrainian energy system, I wanted to talk to active participants in the local energy market in order to find out the situation from the inside. Understand and understand perspectives. With one of the first I managed to talk with Vitaly Kropachev.

Vitaliy Kropachev is a famous Ukrainian businessman, philanthropist. Owner of the UDI Corporation, owning assets in the coal, gas, power generation and media businesses. Before Zelensky came to power in 2019, he was ranked 63rd in the ranking of the richest Ukrainians. Born on October 4, 1973 in the city of Torez, Donetsk region, currently occupied by Russia. Has been in business for over 20 years. In 2011, an attempt was made on Kropachev, which the businessman associated with the attempts of the structures of the son of the ex-president of Ukraine Yanukovych, Alexander Yanukovych, to take away his business.

Picture by Oleg PereverzevPicture by Oleg Pereverzev

In 2014, after the annexation of part of the territory of Ukraine by Russia, he moved to Kyiv and began to actively finance the Ukrainian Patriotic Volunteer Battalions. Participated in the creation of the Shakhtersk battalion. Since the beginning of the full-scale invasion of Russia in February 2022, he has remained in Ukraine, taking an active part in the business and social life of the country.

There is a lot of information in open sources about his connection with the environment of the ex- president of Ukraine Poroshenko. It is alleged that he controlled the entire coal industry for several years, which has a significant impact on the Ukrainian energy system and certainly understands the situation well from the inside. When I asked him about his connection with Poroshenko, who was recently accused of being involved in the supply of coal from the occupied territories, he replied: “I do not know Poroshenko! We have never met. I never delivered coal from LDNR. Moreover, my investments in processing plants and mines have allowed the state to completely abandon the import of coal. Until 2019, the volume of national production grew. In 2019, after a change in the command of power, all programs were stopped. Ukraine started buying coal from Belarus.

Picture by Oleg PereverzevPicture by Oleg Pereverzev

As far as I know, there are no coal mines in Belarus?

“It is no secret that it was coal from the Russian-occupied territories of Ukraine known as the LDNR. Coal mining is a large part of the economy of those territories, but it is not economically feasible to transport this coal deep into the Russian Federation. Historically, the general consumers of coal from there are in Ukraine. In the middle of the 21st year, the main consumers finished paying for Belarusian coal, multimillion-dollar debts were accumulated. For the economy of those territories, this was a significant economic blow.”

Is there a connection between the cessation of coal purchases from "Belarus" and the beginning of Russia's invasion of Ukraine?

“The Kremlin considers the collapse of the USSR a mistake, for Putin there is no independent Ukraine and the Ukrainian people, as well as Belarus. The predominant part of the population of Ukraine does not agree with Putin and is now proving this with their lives. In these circumstances, the start of a big war was only a matter of time, what was used as an excuse is completely unimportant.

You do not deny that the cessation of coal purchases from Belarus could be the reason, but how were things in Ukraine after the cessation of these purchases? Where did Ukraine get coal from and can Ukraine completely abandon coal, as England did, for example?

“I repeat, I believe that the war was inevitable and the reason does not matter. Since the beginning of 2016, with the advent of Igor Nasalyk to the post of Minister of Energy, Ukraine has completely abandoned coal purchases in those territories and has concentrated on national production. It was hard, but we managed. For example, mines owned by me produced more than 2 million tons in total, and factories enriched several times more. The occupied territories during this period were maintained at the expense of the Russian budget, which cost several billion. After the change of power in 2019, national production was completely stopped. We started buying from Belarus. It must be understood that Ukraine consumes coal for energy and industry, and it will be impossible to completely abandon it in the next 30 years. Since the middle of 2021, the Ukrainian energy sector has been in a severe crisis now, the situation is even more difficult.”

Picture by Oleg PereverzevPicture by Oleg Pereverzev

Is Ukraine mining coal now?

"Yes. But, having accumulated a huge debt and realizing that more than 60% of the budget of Ukraine goes to military needs, the miners still descend into the mines and continue mining. This is our contribution to victory. We hope that the state will appreciate this and gradually begin to pay off debts for the supplied products. Here it is necessary to replace that citizens also pay much worse for the electricity they consume. The situation is not a stalemate, requiring discussion and compromise.”

The Ukrainian government does not go to the dialogue?

“There is a dialogue and the main request is “give us more debt”. We all took the blow of Russia together and are fighting the enemy, but there are hotheads in power who remained in the rhetoric of the 2019 election campaign. The war divided the Ukrainians into those who fight and those who surrendered or fled. Those who fight should definitely not be divided into any other groups, this weakens us. I work in Ukraine. If anyone has questions for me, I'm ready to answer them. I have nothing to hide. We need to win and restore the infrastructure of our country, this is the most important thing!”

You are talking about the difficult situation in the Ukrainian energy sector, and at the same time, it is read in your words that you have a solution, but you cannot agree with the authorities. Is this situation only in your country or is it a systemic crisis in relation to the authorities and big Ukrainian business?

“We are not talking about business now. The authorities are focused on victory and are doing everything for the speedy return of our territories. We all see it and help a lot. Everyone who wanted to leave has left Ukrainian assets and is looking for new markets. I am one of those who remained and believe in the victory of Ukraine. Of course, there is a request for more effective communication with the relevant ministries and the office of the president. Putin, by destroying energy facilities, created conditions in Ukraine for an innovative restart of the energy system, which will become a unique experience for the whole world. We need to unite to create a new energy system using the best and most promising developments from around the world.”

What goals does Putin pursue by destroying the Ukrainian energy sector? These actions can break the Ukrainians? How does Ukraine live without electricity?

“Rockets and bombs will not stop the production of electricity in Ukraine. We have electricity. Putin does not destroy generating capacities, their attacks are focused on the infrastructure that ensures the delivery of electricity. This is absolute genocide. These are targeted actions to worsen the living conditions of the civilian population. It has nothing to do with military purposes. A month ago, the entire garden of Kherson was plastered with posters "Russia is here forever ...". Under pressure from the ZSU, they are leaving Kherson and are now bombing it with banned phosphorus bombs. This is an admission of defeat. An act of desperation. For people who have lost their home, it does not matter if a tank destroys the house, a mine or a nuclear bomb. Ukraine has proven that military arguments do not work. The situation in Bakhmut indicates that the scorched desert strategy is also not working. Ukrainians will not be broken.”

What kind of help does the Ukrainian energy system need most of all now?

“Operatively, these are spare parts, a repair fund, generators and industrial storage systems. Most of this nomenclature can be produced on the territory of Ukraine, but this requires money. I now consider it most important to prevent monopolization of decision-making on the distribution of funds for the restoration of the energy system. We have experience with the covid situation where this has given questionable results, but in the example of the road construction situation, this has led to corruption and inefficient use of most of the funds. Especially if it will be done by the same people. In Ukraine, the state is a bad owner. Recovery should become a competitive process, where the best projects from companies from all over the world will be presented and the winners will be determined by the relevant ministry with the involvement of international experts or a specially created international advisory body. Ukrainian big business is definitely ready for this.”

I deliberately decided to leave this conversation without a logical conclusion. Ukraine's war for freedom and independence is in full swing. In this situation, the lines from the national anthem of Ukraine are more relevant than ever: “Neither glory nor freedom has yet died. Even for us, young brethren, fate will smile. Our enemies will perish like dew in the sun. We, brothers, will also reign in our own country.”

The conversation with Vitaliy Kropachev contained many technical nuances about the peculiarities of the production and delivery of electricity in Ukraine, with which I decided not to overload this material. The main message that I read from Kropachev is the willingness to help and the need for dialogue. He certainly deeply understands the situation in the energy sector and generates many constructive initiatives. In the European establishment, on the first day, there is a discussion about the transparency of Ukraine's spending of the allocated financial assistance. Perhaps the creation of some kind of international advisory body will be a solution to the situation, perhaps another solution will be found. Unequivocally, Ukraine continues to fight, and we are obliged to help it in this. The symbolic event that I drew attention to that day was the evening statement by President Zelensky that air defense systems managed to shoot down most of the missiles fired from the Caspian Sea towards Ukraine. With international support, Ukraine is stronger than ever and we have no moral right to stop.