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    Ukraine Power Risk/Reward Index


    May 12, 2022 - Fitch Solutions Sector Intelligence

     

      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Ukraine Power Risk/Reward Index

      • 12 May 2022
      • Ukraine
      • Power

      Key View: Ukraine's position on the Power Risk/Reward Index has deteriorated this quarter, reflecting the impact of the Russian invasion. As well as widespread destruction of power infrastructure, the economic ramifications of the war are extensive and Ukraine faces a long recovery once the conflict has ended. The country is therefore ranked a weaker 21st out of 25 CEE markets this quarter. There is scope for a further downwards revision of scores on both the Risks and Rewards sides dependent on the duration of the conflict.

      Risk/Reward Snapshot
      Ukraine & Emerging Europe Power Risk/Reward Index

      Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions Power Risk/Reward Index

      Global And Regional Ranks

      • Regional rank (out of 25): 21st
      • Global rank (out of 117): 108th

      Key Features And Latest Updates

      • Ukraine's strongest score across the Power Risk/Reward Index (RRI) is for Industry Rewards as the country has one of the highest levels of installed power capacity in the region. We have, however, made sharp downwards revisions to our growth forecasts for the market due to the conflict and expect that scores for installed capacity will also be revised as the scale of infrastructure damage is assessed.
      • The Country Rewards score has been revised down this quarter, reflecting the enormous economic impact of the war, as well as increased vulnerability to supply chain disruptions and the impact of the war on the population, with more than 4mn Ukrainians forced to flee the country and an additional 3mn internally displaced (as of the time of writing, April 2022).
      • Even prior to the conflict, Ukraine's power sector was impacted by multiple industry-related risks, most notably an inefficient and outdated power sector, where the state still plays an excessive role, and limited legal protections. In the short term, economic constraints will severely limit growth in the power sector, though we do note that once the conflict is ended, Ukraine is expected to attract enormous aid inflows.
      • Ukraine's weakest score on the RRI is now for Country Risks. The Russian invasion has far-reaching implications for economic and political stability in the country. The country has been pushed into a deep recession in 2022 and the start of the recovery is entirely dependent on the duration of the conflict and the manner of its resolution.

      RRI Matrix Breakdown
      Ukraine & Emerging Europe - Power Risk/Reward Index By Component

      Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions Power Risk/Reward Index

      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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