One of Ukraine's largest energy companies, public joint-stock company Centrenergo, paid UAH 132 million in advance to a private firm under a coal supply contract. However, the company failed to deliver the coal and did not return the balance of the advance payment, stated in its article by the Bihus.Info media outlet, citing court case materials.

Centrenergo produces electricity and heat. 78% of the company is owned by the state, and it manages Trypilska, Zmiivska and Vuhlehirska thermal power plants. These facilities are fired by coal, which means that procurement of coal is one of the company's main tasks.

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"In September 2024, Centrenergo entered into an agreement with Teplosphere UA LLC to supply 33.5 thousand tons of coal to Trypillia and Zmiivska TPPs. The deal was concluded under a simplified procedure without an open tender, as it was about supplying coal to the TPPs for the heating season. The company was given UAH 132 million in advance, but it disrupted the schedule, delivered only 1,500 tons and did not return the balance of the unused advance," the journalists said.

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The company filed a lawsuit with the court, and the court ruled to recover UAH 127 million (debt, penalties, interest, etc.) from the supplier.

However, during the hearing, the judge found a number of circumstances that cast doubt on the good faith of not only Teplosphere SA, but also Centrenergo itself, and even the system of coal procurement for TPPs as such.

"In particular, he found that the advance payment was not mandatory - the contract provided for payment after delivery. The advance payment could be made only if the supplier provided guarantees, but the supplier did not provide a bank guarantee, but just a letter that did not affect anything and did not secure anything. In addition, in court, Centrenergo stated that it had signed an agreement with a private company because state-owned producers allegedly had no coal," the journalists said.

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However, after seeking additional explanations, the court found that the company bought coal from state-owned producers: Teplosphere entered into agreements with the producers after the contract with Centrenergo, after providing a letter of guarantee, and even after receiving part of the prepayment.

"That is, at the time of the contract, Centrenergo had not only no insurance for money, but also no guarantee of receiving coal in general," the media outlet emphasizes.

When the judge eventually discovered that the supplier was purchasing coal from the mines at the same price as it wanted to sell it to the company, he concluded that this could indicate that the company did not want to fulfill the contract but simply pocket the money from the advance.

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The judge qualified everything he found as a systemic flaw in Centrenergo's operations as a whole, so he issued a separate ruling to the Cabinet of Ministers to regulate procurement procedures and related risks, emphasizing in particular that state-owned coal should be purchased directly for state-owned companies.

However, the Ministry of Energy responded that Ukraine has free economic competition, which it cannot restrict.

Screenshot: Bihus.Info

"The owner of Teplosphere UA LLC is Ihor Kachmar, who until recently was a co-owner of another problematic supplier, Energo Resource Group LLC. This company also took a large advance payment, but some of the coal was of inadequate quality, so now the by court order should return UAH 240 million to Centrenergo," the journalists noted.

Also, according to the court register, another supplier, Optenergotorh LLC, owes Centrenergo UAH 77 million, as this company has supplied less than half of the promised coal and, like Teplosphere, has not returned the balance of the advance payment, Bihus.Info noted.