Recent trends in Ukraine’s public electricity procurement are raising alarms about decreasing competition and rising costs for the state. Reports indicate that the current procurement practices are leading to fewer successful tenders and escalating expenses.
According to industry expert Yacubovskyi, a noticeable decline in competition is evident in both open tenders and the “Prozorro Market,” which currently facilitates around 70% of electricity purchases. He noted that the effectiveness of these procurement methods is diminishing, with many tenders failing to attract bids on the first attempt.
Yacubovskyi pointed out that the number of successful purchases is decreasing, indicating a troubling trend where tenders are increasingly unsuccessful from the outset. He stated, “We see that both in open tenders and in the Prozorro Market, overall success in procurement is falling, meaning that purchases do not occur on the first attempt.”
Moreover, he highlighted that suppliers are increasing their margins to account for additional risks in their pricing strategies. “In our own procurement activities over the past six months, we have observed a clear trend of worsening competition and rising margins,” he remarked.
This situation is directly impacting government expenditures, as the decline in competition is undermining the efficiency of the procurement system. Yacubovskyi emphasized, “We can understand the potential losses the state incurs due to the basic inefficiency that has emerged in electricity procurement.”
Market participants warn that without changes to current practices, the situation is likely to deteriorate further, leading to a continued reduction in the number of suppliers willing to engage with the public sector.
Previously, industry players had expressed concerns about the risks associated with working with government entities, particularly due to procurement audits. Additionally, experts have noted that the existing judicial practices surrounding electricity procurement are contributing to the criminalization of market activities, which further reduces competition and heightens risks for reliable electricity supply to the public sector.
During a discussion at the Energy Club, Vitaliy Bulat, a partner at the law firm FEDOTOV & PARTNERS, remarked that the judicial landscape in public procurement is causing some suppliers to withdraw from contracts with state and municipal clients.
Furthermore, the electricity market in Ukraine is facing significant financial challenges, with debts reaching critical levels of approximately 70 billion UAH. Notably, as of early 2026, the debt owed by Ukrenergo to balancing market participants has climbed to 30.9 billion UAH, marking a 40% increase.
Ukraine's public electricity procurement is experiencing a decline in competition and rising costs, prompting concerns about its efficiency and the willingness of suppliers to engage with the state. Experts warn that without reform, the situation could worsen significantly.