Energy Club Calls on the Government to Stop the Draining of Funds from State-Owned Oblenergos

20.03.2026

Energy Club has sent a new official appeal to the First Vice Prime Minister, Minister of Energy Denys Shmyhal. In the letter, we draw attention to a deeply concerning situation regarding financial responsibility for conducting general meetings of state-owned distribution system operators initiated by the management company JSC “Ukrainian Distribution Grids” (UDG).

Following public disclosure, state-owned oblenergos began publishing the minutes of extraordinary shareholder meetings held back in late February. An analysis of documents from Khmelnytskyoblenergo, Ternopiloblenergo, Zaporizhzhiaoblenergo, and Mykolaivoblenergo revealed an identical and completely paradoxical picture.

During the voting on a key agenda item, the majority shareholder, represented by JSC “UDG”, voted against its own decision to terminate the powers of the current supervisory boards. As a result, no management changes took place. However, representatives of JSC “UDG” gave 100% support to another point: obligating the oblenergos to fully compensate the management company for the costs of organizing these remote meetings.

The organization of one such meeting costs approximately 150,000 UAH. The total amount of compensation to be borne by state enterprises reaches 700,000–800,000 UAH. To understand the scale, this figure is equal to the monthly electricity bill of a significant settlement of 500–600 households.

Energy Club President Andrii Kostrytsia emphasizes that these funds are being drained from the working capital of distribution system operators at a most critical moment. Currently, companies desperately need every penny to purchase transformers and basic materials, and to restore networks damaged by shelling. Instead, funds are being spent on paying for hollow corporate procedures with zero results.

Given the situation, Energy Club requests the Government leadership to intervene and take two key steps:

1. Provide a proper state assessment of the actions of JSC “UDG” officials who shifted the financial burden of these fruitless meetings onto the state-owned DSOs.
2. Initiate an audit of the legality and expediency of paying such compensations at the expense of critical infrastructure enterprises’ budgets.

Energy Club is convinced that corporate governance must be built on legality and financial discipline, rather than on covering the consequences of the initiators’ unprofessional actions.