Description
The World Bank wanted to assess the financial standing of Ukraine's gas sector and major gas companies after tariff reforms in 2014 and 2015 and in advance of further planned increases in 2016-2017 and to prepare recommendations for any corrective actions needed based on the outcomes of the assessment.
Service Provided
DHInfrastructure reviewed the legal, regulatory and institutional framework of Ukraine's gas sector and outlined the responsibilities and contractual arrangements of major companies and Government entities. We also described existing and planned tariff-setting regulations. DHInfrastructure then conducted financial analyses of gas production, transmission, storage, wholesale, distribution, and retail supply operations of major companies in Ukraine. These analyses examined the effect of tariff reforms enacted in 2015 and 2016 on sector and company revenues and costs. Finally, we recommended how to improve the financial standing of the gas sector and companies in a sustainable and affordable manner, while also preparing the sector for full competition. Our recommendations included automatic tariff adjustments based on import prices and the exchange rate, streamlining the subsidy settlement system, completing unbundling of the sector, and phasing out excess storage capacity.