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Cablegate: Ukraine: Opic-Supported Global Renewable Energy

VZCZCXYZ0160
RR RUEHWEB

DE RUEHKV #1719 2781016
ZNR UUUUU ZZH
R 051016Z OCT 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC 8522
INFO RUEHRC/USDA FAS WASHDC
RUCPDOC/USDOC WASHINGTON DC

UNCLAS KYIV 001719

SIPDIS

STATE FOR EUR/UMB AND EEB
STATE PASS OPIC FOR BARBARA BRERETON

E.O. 12958: N/A
TAGS: ECON EFIN UP OPIC
SUBJECT: UKRAINE: OPIC-SUPPORTED GLOBAL RENEWABLE ENERGY
INVESTMENT FUND

REF: STATE 95170

1. OPIC does not currently operate in Ukraine due to a
long-standing claim for which OPIC seeks compensation from
the GOU. Although OPIC and the GOU have made recent progress
to settle the matter, a number of detailed legal issues still
need to be resolved and it is too early to know if and when
OPIC will be ready to do business in Ukraine again. As a
result, it is Post's understanding that USRG Emerging Market
Fund (USRG) would not pursue investments in Ukraine in the
near term.

2. However, should OPIC return to Ukraine, Post would
support USRG investments in renewable power generation, clean
fuels, and renewable energy value chain projects. USRG's
goals of reducing greenhouse gas emissions and reducing
energy imports are compatible with Ukraine's economic
development programs. Ukraine is one of the world's 15
largest emitters of greenhouse gases and is also seeking to
move away from its heavy dependence on Russian oil and gas
imports.

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3. It is likely that Ukraine would welcome USRG investment
in renewable energy projects, as it has welcomed similar
investment from the EBRD and other international
institutions. There is limited funding for renewable energy
projects in Ukraine, and the market is far from saturated.
While the investment climate in Ukraine is difficult, if
partners are chosen carefully, the strong government support
for projects that reduce Ukraine's energy consumption and
imports means USRG could enjoy a measure of success. Post is
not aware of any disparaging or derogatory information within
Ukraine with respect to the prospective fund manager.
PETTIT

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