Daily Insight-In the spotlight: Ukravtodor to receive loans of over EUR770m in 2010, DTEK\\\'s exports to Belarus

As of 10 November, DTEK, through its subsidiary, thermal GenCo Vostokenergo LLC, began exporting electricity to Belarus, the load profile of which is variable (i.e., different for each hour of a day), with 300 MW being the maximum allowed capacity for the service. DTEK expects that it will export 136m kWh till the end of this month. Additionally, DTEK\\\'s press service also disclosed that the electricity exports were started due to a \\\"technical possibility\\\" that emerged for the service following DTEK\\\'s contract to supply electricity to Belarusian concern Belenergo which began back on 1 September, \\\"on the application of the Belarusian side\\\".

Investment implications: The commencement of these exports into Belarus this fall shows that DTEK\\\'s flexible-load electricity supply is competitive the country, which has been a significant importer of Ukraine\\\'s electricity this year, making up roughly 70% of Ukraine\\\'s total electricity exports in the 10M10). We attribute this competitiveness primarily to the relatively low price of DTEK\\\'s own coal (although we cannot completely rule out transfer pricing within DTEK) and the low per-unit consumption of fuel by the increasingly efficient thermal power plants of DTEK, and especially those comprising Vostokenergo, DTEK\\\'s 100% owned LLC subsidiary. We conjecture that a window of export opportunity temporarily opened for DTEK because two power units of the Rivne nuclear power plant (NPP), which is located near the Ukraine-Belarus border, temporarily went off-load due to planned repairs, while normally, Ukraine exports flat-load electricity to Belarus from this and other NPPs. If we are correct about this, then we estimate that windows of opportunity may open for DTEK\\\'s exports to Belarus only periodically, for perhaps two