At its meeting on 6 May, the Cabinet of Ministers of Ukraine appointed Herman Galushchenko and Hartmut Jakob as vice-presidents of nuclear utility Energoatom, ending months of wrangling between different factions for control of the organisation.
Hartmut Jakob will head Energoatom's financial and economic department and will focus on its financial stabilisation. Herman Galushchenko will be responsible for its long-term development.
Energoatom said it welcomed the government's decision as critical during the difficult financial situation facing the company as a result of non-payment for electricity supplied in the context of reduced consumption during anti-pandemic measures.
Galushchenko is an experienced lawyer with many years of experience in the public and private sectors, associate professor of international private law at the Institute of International Relations of the Taras Shevchenko National University of Kiev. He graduated from Lvov State University with a degree in law, also graduated from the Ukrainian Academy of Foreign Trade with a degree in management of foreign economic activity, has a master's degree in international management. In 2013-2014, he was the executive director for legal s upport at Energoatom. Since 2012 he has been teaching private international law at the Institute of International Relations of the Taras Shevchenko National University.
Hartmut Jakob is an investment banker, leading financier and specialist in the energy sector with more than 20 years of experience. He holds a master's degree in international economics and finance from Johns Hopkins University in the United States. He also has a master's degree in political science from the Free University of Berlin. His experience includes working at the World Bank and leading investment banks in Eastern Europe. He worked as the head of energy research in the London office of the Austrian investment bank Creditanstalt, held the position of Chairman of the Board of the investment company Renaissance Capital Ukraine. He is a German national.
The same day, the cabinet made a number of other ministerial appointments including Yuriy Boyko as deputy minister of Energy and Environmental Protection.
Staff changes at Energoatom
Staff at Energoatom had changed a number of times since November 2019, when the cabinet dismissed Yury Nedashkovsky as President citing "ineffective management" and suspicions of corruption. He was replaced as acting president by the general director of the Rovno NPP Pavel Pavlyshin.
In late January, the cabinet also fired three long-standing vice presidents of Energoatom - Aleksandr Shavlakov (first vice-president since March 2011), Vladimir Pyshny (vice-president since February 2004) and Aydin Aisin (vice-president since June 2010). In February, the duties of the first vice president and technical director were assigned to Valery Kravets, executive director for production, and Angela Depelyan, director for finance and budgeting.
A competition for the permanent post of president was announced in early March but quickly dropped after the State Nuclear Regulatory Inspectorate criticised it. They stressed the need to include basic specialist qualification requirements in a letter to the office of the President of Ukraine, the National Security and Defence Council, the Cabinet of Ministers and the Verkhovna Rada (parliament) Committee on Energy and Housing and Communal Services. In response, the Verkhovna Rada Committee, as well as elected representatives of the districts where nuclear power plants are located, addressed the leadership of the state and the Security Service of Ukraine insisting that Energoatom should be headed by an experienced specialist in the nuclear industry.
During March officials in the prime minister’s office put forward Hartmut and Galushchenko for the post of Energoatom vice-presidents. However, this was opposed by acting Minister of Energy and Environmental Protection Vitaly Shubin who put forward two alternative candidates - Sergey Tarakanov (Director of Holtec Ukraine) and Konstantin Kobu.
At the end of March, Pavel Pavlishin resigned as temporary acting head of Energoatom, and the cabinet appointed Petr Kotin, director general of the Zaporozhye nuclear power plant. Kotin, a graduate of the Moscow Engineering Physics Institute with a degree in Nuclear Power Plants and Installations, had previously worked at Energoatom as a production director.
Kotin, according to local media reports, supported the appointment of Galushchenko and Hartmut but Shubin still refused to endorse them. The conflict reached its climax on 9 April, Uazmi reported, noting that Kotin formally compained about Shubin’s actions directly to Prime Minister Denis Shmygal. On 16 April the cabinet dismissed Shubin, who was replaced by Olga Buslavets, a power engineer and formerly director general of the Energy Markets Directorate of the Ministry of Energy and Coal.
Late April then saw several legislative changes designed to support Energoatom’s recovery from months of in-fighting and inaction. The April open letter from the nuclear veterans appears to have been a key factor in this. It noted that for months Energoatom, “has had no permanent managers able to receive the relevant permissions from the nuclear regulatory authority”. Therefore, legally no one is responsible for the safety of NPPs, they said. The veterans drew the attention of the state’s leadership to attempts to “drag” people professionally distant from nuclear power into the management of Energoatom and to manage financial flows “in the interests of people for whom their own prosperity is more important than the well-being of the country and its population”.
Ukraine's new nuclear safety bill
On 27 April, parliament adopted at first reading a nuclear safety bill re-establishing the independence of the State Nuclear Regulatory Inspectorate, which had been effectively placed under the control of Energoatom in 2016.
This change makes it possible for Energoatom to now take out an additional loan of €200 million ($217m) for safety programmes, the Head of the Rada committee on energy and housing and utility services Andriy Gerus said a briefing in parliament on 24 April.
He also said that the bill is aimed at renewing and strengthening the legal status and independent functioning of the State Nuclear Regulatory Inspectorate.
The authors of the bill said renewal of the inspectorate’s independence is a condition of several international documents, in particular, the Memorandum of Understanding on a Strategic Energy Partnership between the EU together with the European Atomic Energy Community and Ukraine, as well as the agreements between Ukraine and the European Atomic Energy Community regarding the provision of a loan to Energoatom, equivalent to €300 million, for safety programmes.
Draft law on electricity market debt
Another bill was adopted on 30 April as a basis the draft law "On measures aimed at repaying debts formed in the wholesale electricity market." The bill is intended to resolve issues of debt to electricity suppliers by the state-owned Energorynok, which arose before the introduction of the new electricity market. At the time of termination of the activities of SE Energorynok (August 2019), the receivables of Energoatom amounted to almost UAH 12 billion ($446m).
The adoption of this bill was preceded by a meeting of the Anti-Crisis Energy Headquarters, chaired by the Prime Minister Shmygal. During the meeting, the government presented a set of priority steps to overcome the crisis in the energy system and specific measures aimed at solving the financial problems of the industry. Local media reported that Ukrainian nuclear scientists and their families welcomed the decision. aimed at solving the difficult situation in the energy sector.