Dismissal of Ukraine energy grid chief prompts resignations, international concern amid Russian energy strikes

The controversial decision to dismiss the head of Ukraine’s state-owned energy grid operator has prompted resignations from two independent members of the company’s supervisory board and raised concerns from partners abroad.  
Volodymyr Kudrytskyi, who served as head of Ukrenergo since 2020, was dismissed on Sept. 2 on the grounds of failing to protect Ukraine’s energy infrastructure amid Russian missile strikes, according to a statement from the company’s supervisory board chairman Daniel Dobbeni and board member Peder Andreasen.
Following his dismissal, however, the two said in a statement that the dismissal was “politically motivated” and had “no valid grounds.”
“From the first days of our work in the Supervisory Board of Ukrenergo, we felt political pressure and observed constant attempts to bypass the competition to appoint people whose professional qualities were questionable to the company’s management board,” their statement said, which also announced their resignation on Sept. 3.
Oleksandr Kharchenko, managing director of the Energy Industry Research Center, said the dismissal will very likely erode trust with international partners.
“I believe that the main consequence will be a lack of trust, and this means that the Ukrainian energy industry will lose a huge part of international support. Ukrenergo was a key focal point to accumulate international support to repair Ukrainian energy capacity that was damaged or destroyed,” Kharchenko said.
“Now this point will break, and it means we could lose a lot of support in the short term.”
The news was followed by reports that other top ministers had submitted their resignations to Ukraine’s parliament after months of speculation of a government reshuffle.
According to Suspilne news, the supervisory board voted four to two for his dismissal, with three state-appointed members voting for Kudrytskyi’s dismissal along with one independent member, and Dobbeni and Andreasen voting against.
Kudrytskyi told Reuters news that “the decision of the Supervisory Board to dismiss me has nothing to do with the security of Ukrenergo’s substations.”
“I cannot go into details, but more than 60 anti-drone shelters have been built at Ukrenergo’s substations, almost at every substation,” he added.
The Energy Ministry, which manages Ukrenergo, did not respond to a request for comment.
With Ukraine hammered by ongoing Russian missile strikes that have targeted the energy grid, the country has relied on foreign investment to repair and restore infrastructure amid regular power outages.  Under Kudrytskyi’s tenure, Ukrnergo attracted more than 1.5 billion Euros ($1.66 billion) for repairs in loans and grants.  
Prior to his dismissal, international energy financing partners wrote to Ukraine’s Prime Minister Denys Shmyhal, expressing “grave concern” about rumors of his potential dismissal and requesting a delay in the decision until an empty independent board seat could be filled.
Representatives for the EU, the European Bank of Reconstruction and Development (EBRD), the International Finance Corporation, and the Business Ombudsman Council signed the letter.
Arvid Tuerkner, a signatory to the letter and EBRD’s managing director for Ukraine and Moldova, told the Kyiv Independent in a statement that, while the organization has a long-standing relationship with Ukrenergo and further investment projects in mind, “further engagement will now be needed for us to monitor the evolving situation carefully and get comfortable with a new management team.”
“It is untimely to have a sudden change of leadership in the midst of the war and the energy crisis. There is now an acting CEO but a proper search will need to be carried out for a permanent CEO. The sudden change of management could, as is often the case, delay progress in the implementation of important projects,” Tuerkner said.
“This is very unfortunate and again casts a shadow on Ukraine’s reputation in terms of corporate governance.”
Sitting board member Oleksiy Brekht has been appointed as the interim head of Ukrenergo.
In addition to protecting and maintaining the energy grid despite frequent Russian strikes, Ukrenergo also led the push to disconnect Ukraine from the Russian and Belarussian energy grid and connect it to the European grid in the lead-up to the 2022 full-scale invasion under Kudrytskyi’s tenure.
With the winter season fast approaching, when heating demands place heavier strain on the energy grid, energy experts are watching to see how this could affect the company’s efforts to keep the country’s energy infrastructure operational.  
“I hope his dismissal will not create a crisis related to the financial support from international organizations and will not lead to problems with the certification of the Ukrainian TSO (Transmission System Operator) according to EU standards,” former lawmaker and political consultant on energy and climate Oleksii Riabchyn told the Kyiv Independent in a statement.
“This is crucial during the war and in preparation for another challenging winter,” he said.
Kharchenko of the Energy Industry Research Center said: “Myself and many other experts marked the professionalism of Mr. Kudrytskyi. He did a lot of right things, and the company did a lot of right things under his management. It’s very hard to understand.”