Simplify procedures for connecting to electricity and gas networks in Ukraine – a new recommendation of the IWG on deregulation

Procedures for connecting to electricity and gas networks in Ukraine have a strong impact on the ease of doing business and the investment climate in the country. In the latest World Bank Doing Business report for 2020, the procedures for connecting to electricity networks were the very factors that significantly lowered Ukraine’s rating. In particular, the duration of this process in our country is currently three times longer than in the OECD countries.

The problem in this procedure is the allocation of land plots by local self-government bodies for the needs of connecting to engineering networks. Based on the results of the discussion at the IWG meeting, it was decided to conduct an additional study of issues related to accession procedures at the expert level and to prepare proposals for a comprehensive solution to the problem. The projected and short terms of accession will positively affect the investment climate of Ukraine, contribute to the creation of new jobs, increase in the production of goods and services, and additional revenues to the state budget.

To remind, BRDO specialists have been working on simplifying the procedure for joining engineering networks in Ukraine for several years. Analysis and proposals for the regulation of this issue can be found in the Green Paper “Regulation of connection to utility networks”.

In general, during the work of the IWG, almost 40 instruments of state regulation were analysed in the sphere of competence of the Ministry of Energy of Ukraine and the National Commission in Energy and Communal Services – it is recommended to cancel the certificate of state registration of production sharing agreements – by creating a register of production sharing agreements and getting rid of the rudiment of a paper certificate.

The rest of the tools are recommended to be optimised and modernised, for example, the conclusion based on the results of the state examination of investment projects in the field of gas and energy, which should be obtained in the process of interdepartmental interaction of authorities without the involvement of business.

Previously, the IWG analysed and recommended the cancellation or optimisation of instruments from the sphere of competence of 8 central executive bodies. In particular, the ministries of economy, healthcare, protection of the environment and natural resources, education and science, culture and state information policy, infrastructure, etc. In general, according to the results of previous meetings, the IWG recommended canceling about 30% of tools, optimising 70%.

The IWG on deregulation is headed by First Deputy Prime Minister – Minister of Economy of Ukraine Yuliia Svyrydenko and Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov. The meetings are also attended by representatives of leading analytical centers, in particular the BRDO.