As a member of the European Energy Community Ukraine has undertaken to liberalizeits electricity market. To fulfill this commitment, on 24 October 2013 theUkrainian Parliament adopted and on 3 December 2013 the President signed theLaw "On Operating Principles of Electricity Market of Ukraine" (the"Law"). The Law will come into effect on the first day of the monthfollowing the month of its expected official publication.

Under the existing electricity trading module, electricity should be tradedin the most of the cases through the state operated entity, the Whole SaleMarket of Ukraine, and under strictly regulated prices. Purporting to create amore competitive electricity trading regime, the Law foresees liquidation ofthe Whole Sale Market of Ukraine and provides for establishment from 1 July2017 of four trading platforms, or "markets", in particular the (a)market of bilateral agreements; (b) day-ahead market; (c) balancing market; and(d) retail electricity market. Under this new module electricity producers willbe able to trade electricity through any of the markets, save for certainregulatory limitations. Moreover, certain groups of customers will be allowedto choose their supplier of electricity. Such flexibility and competitiveelectricity prices will result in a much more liberalized electricity market.

A separate regime will apply to electricity produced from alternative energysources which may be traded at the (a) market of bilateral agreements; (b)day-ahead market; and (c) balancing market. However, electricity traded at thefeed-in ("green") tariff must be purchased under bilateral agreementsby a mandatory governmental buyer (a successor of the State Company"Energorynok"), which should then re-sell it at the day-ahead marketin accordance with the electricity production hourly schedules provided bygeneration companies. Expenses incurred by the mandatory buyer must becompensated by the Cost Imbalance Allocation Fund.