Latest power struggle at Ukraine’s state grid operator ends as CEO dismissal reversed
The supervisory board at Ukraine's state grid operator has backed away from plans to oust its CEO, the latest episode in a recurring power struggle for the reins of a company that controls the country's transmission lines and oversees substantial international funding.
The decision comes after three days of court sessions where the supervisory board’s independent members went up against the CEO, Vitaliy Zaichenko, and the Energy Ministry, Ukrenergo’s main shareholder. The board said it had lost confidence in Zaichenko after events in recent weeks, but did not give specific reasons.
Zaichenko condemned the board’s unexpected decision on Sept. 26 as illegal, with the ministry filing a request to a Kyiv court to temporarily halt the decision to dismiss him on Sept. 30, which the court granted.
After today's decision, the Energy Ministry and the supervisory board sought to show that they had reconciled the differences that led to moving to dismiss Zaichenko.
"The Energy Ministry and the Supervisory Board will continue to cooperate closely, holding regular meetings to discuss current and urgent issues, including the protection of critical infrastructure facilities, stable operation of the energy system, and improving the company's financial condition," the Energy Ministry wrote on Telegram on Oct. 2.
The resolution marks the end of another battle for Ukrenergo — the sole manager of the country's high-voltage power lines with revenues exceeding 100 million hryvnia ($24 million) and 1.5 billion euros in funding from international partners.
“The situation is a continuation of long-standing attempts by the authorities to take Ukrenergo under manual control. I believe that the current escalation is, unfortunately, not the final one,” lawmaker from the Holos party Inna Sovsun told the Kyiv Independent.
"With every attack on corporate governance in the company, the willingness to provide it with funding decreases. Trust is something that is very hard and time-consuming to build, and very easy to lose."
In comments to the Kyiv Independent on Oct. 2, Zaichenko called the board's decision "emotional" when asked why the situation had occurred at all.
According to Zaichenko, the sides agreed on “more transparent and frequent communication” between the Supervisory Board, the ministry, and Ukrenergo’s management, adding that the three management board members who were also dismissed had been reappointed, while an additional board member was appointed to oversee risk management.
The company has faced several controversies since 2018, when its first supervisory board was introduced to ensure independence from the Energy Ministry during Ukraine’s state-owned enterprise reforms.
The last big dispute erupted in September 2024, when respected former CEO Volodymyr Kudrytskyi was ousted, sparking concern from international allies like Brussels for Ukraine’s energy security. After his exit, he warned that it was important for his successor to be selected transparently so that the company wouldn't descend into a "generator of cash flows" for corruption.
Like all state-owned companies that handle massive procurement of equipment and services, Ukrenergo is a lucrative target for stealing, siphoning, and inflated price schemes, Andriy Boytsun, an independent corporate governance professional, told the Kyiv Independent.
Controlling Ukrenergo could create opportunities to inflate the government’s compensation for subsidized household electricity tariffs and premium payments to green energy producers, he added.
"Once you control such a large state enterprise, it also gives you political power and power over the industry," he said.
