Norwegian company delays 1 billion euro construction of Ukrainian wind farm

Emergy, a Norwegian sustainable energy company specializing in wind farm construction, has delayed a planned wind farm project in Zaporizhzhia Oblast in southeastern Ukraine, according to the company’s statement.

 The wind farm, called Zophia, was planned to be one of the largest in Europe and attracted over EUR 1 billion ($1.1 billion) in foreign direct investment. The wind farm is planned to consist of three stages and generate 750MW of power.

Emergy’s plans were influenced by three main factors:

· constant issues with receiving payment from the State Company Guaranteed Buyer, which is supposed to receive the energy generated;

· difficulties in attracting large-scale foreign direct investment to the Ukrainian renewable energy market (partly due to the geopolitical situation with Russia);

· a short period of time left for the construction and commissioning of wind farms (all renewable energy projects need to be built before the end of 2022 according to current regulations in Ukraine)

The company said it had begun construction on specific project infrastructure, and is reviewing alternative opportunities to sell electricity before resuming construction at Zophia.

In particular, Emergy is considering the possibility of signing bilateral contracts for the purchase of electricity with large-scale customers.

In Oct. 2019, Norwegian company NBT AS, which later became Emergy, and China Electric Power Equipment signed two contracts for the construction of wind farms Zophia II and Zophia III in Zaporizhzhia Oblast.

NBT, together with the French energy company Total-Eren, has implemented one project so far in Ukraine – the Syvash wind farm with a capacity of 250 MW inKherson Oblast (along Lake Syvash). 

NBT told NV Business that total investment in the Zophia project will reach EUR 1 billion, in Syvash – about EUR 380 million ($436 million), and that the project will likely remain on pause until Emergy decides how to sell the energy.

Thorstein Jenssen, Senior Vice President for Corporate Finance at NBT, said in comment to NV that if the feed-in tariff is changed retrospectively, the company’s projects in Ukraine face default.