The Kyiv City Administration and Kyivenergo (KIEN UZ) have signed statements recognizing that Kyiv owed UAH 1.239b (US$ 160M) to the utility company in terms to cover the difference between existing heating tariffs approved by City Administration and the company's expenses for heating production during 2000 - 1H09. According to Ukrainian legislation, the difference should be compensated by the authority which is responsible for setting of the tariffs (City Administration).
We estimate this news as neutral for the company. In 2009 Kyiv has already paid UAH 900mn (USD 116mn) to Kyivenergo and partially compensated tariff difference for 2000-2008, as at the beginning of the year total debt for heat tariff difference amounted to UAH 1.5b (USD 195M). Now the signed agreement confirms intention of City Administration to cover the rest of this sum, but there is no clear certainty that repayment will take place in short term.