Struggle for a place under the sun

The Chinese State Corporation CNBM (China National Building Materials) is one of the most powerful players on the so-called green energy market in Ukraine. This business is very profitable as the Ukrainian state buys green energy from producers at one of the highest tariffs in Europe.

CNBM controls 10 enterprises. Its main facilities, SPPs, are located in the Mykolaiv and Odessa regions. Their total capacity is 267 MW.

Limanska solar plant in the Odessa oblast. Source: Wikipedia

This is one of the largest facilities in Ukraine’s solar energy sector. In 2018, the company sold its energy to the Ukrainian state for UAH 3 billion ($ 113,2 million), the largest amount among all Ukrainian producers of renewable energy. Overall, CNBM ranks second in the green energy market after DTEK, a group owned by the Ukrainian tycoon Rinat Akhmetov. CNBM`s 10 power plants supply electricity to up to 70,000 Ukrainian households. But in reality the cost of this green energy is not beneficial for Ukrainian citizens, since it is 10 times higher than electricity produced by existing nuclear power plants and other power-generating facilities.

The Chinese state corporation entered the Ukrainian market in the early 2010s, spending about $ 1 billion in investment and trade finance. CNBM supplied solar power equipment to the Ukrainian pioneer company Activ Solar, which built SPPs in southern Ukraine. At the time this company belonged to Andriy Klyuyev, First Vice Prime Minister of Ukraine, and his brother, MP Sergiy Klyuyev. Both were close allies of former Ukrainian President Viktor Yanukovych.

One of the former owners of Activ Solar, Sergiy Klyuyev, fled to Russia in 2016. Source: Reuters

Until 2016, Activ Solar was basically a monopolist on Ukraine’s solar energy market. The high green tariff and corruption schemes widely used by the Klyuyev brothers allowed the owners to earn extra profits.

Both brothers are wanted now. Sergiy Klyuyev is suspected of abuse of power, misappropriation of property, fraud, money laundering. Andriy Klyuyev is involved in cases of unlawful interference with peaceful actions, excess of power and appropriation of property. In 2014, the EU had imposed personal sanctions on both brothers, but several years later they were lifted, NGO Center for Combating Corruption said.

After Sergiy Klyuyev fled to Russia in 2016, Activ Solar faced financial problems. According to representatives of the Chinese company, Activ Solar owed CNBM hundreds of millions of dollars. Therefore, all Activ Solar assets were transferred to its lender, CNBM International Corporation, to cover the debt.

Some Ukrainian politicians claimed that the Chinese company had ties with one of the fugitive brothers, Andriy Klyuyev. However, CNBM CEO Chen Yongzhi dismissed these allegations as attempts to justify discriminatory policies toward the company.

“We are a state-owned company and are responsible for government investments, and we do not work with individuals, especially with oligarchs — only with companies that have passed all the approval procedures within our group,” he said.

In 2016, CNBM and the Ukrainian Energy Ministry signed a Memorandum of Cooperation. The Chinese state corporation announced its intention to invest around $ 2 billion in equipment upgrades.

Meanwhile, the high green tariff that the Chinese were counting on has depreciated due to the country’s high inflation rate. The National Electricity Regulatory Council ruled that green energy companies should be compensated for the loss in tariffs. But CNBM’s solar power plants were not on this list.

CNBM New Energy Engineering CEO Yunzhi Chen called it discrimination.

“We can assume that the list was composed in a non-transparent and selective manner. Our companies have filed suit and won but the situation has not been resolved. In contrast to all other renewable energy producers, our facilities have not received compensation,” he said.

Nevertheless, some of CNBM’s SPPs have the most lucrative tariffs on the market, allowing the company to receive its highest income in 2018.

In 2019, the corporation claimed that there were attempts to seize one of the power plants owned by a subsidiary of CNBM, Voskhod Solar LLC, using law enforcement agencies.

“Since the beginning of 2019, there have been regular attempts to raid the Voskhod Solar LLC, organized by a group of individuals,” the company’s managers wrote to the Ukrainian president last May.

It turned out that before Voskhod Solar LLC’s assets were transferred to the Chinese, the company took out a loan from Activ Bank, which also belonged to the Klyuev brothers. This bank was subsequently declared bankrupt and turned over for liquidation to the Private Deposit Guarantee Fund. In December 2018, LLC Investohills West Financial Company purchased the right to claim Activ Bank’s pool of bad loans. Among these were the financial obligations of Voskhod Solar LLC before the bank secured by collateral.

Ukrainian courts have recognized the legitimacy of this claim and ruled to compensate Investohills Vesta Financial UAH 204 million ($ 7,5 million).

CNBM New Energy Engineering CEO Yunzhi Chen threatened to file an international investment lawsuit against Ukraine for not granting the Chinese investor justice.

However, later Investohills reported that “an agreement has been reached in the dispute on debt settlement” with Voskhod Solar LLC and “all claims have been settled”.


China National Building Materials (CNBM) is one of China’s largest state-owned corporations. Fortune ranked it among the Top 500 largest global companies in 2011.

CNBM already ranks # 1 in the world in cement, plasterboard and fiberglass production.

CNBM ranks # 1 in Asia and # 3 in the world in wind blade production.

In 2017, its corporate revenue was $ 44.7 billion and total managed assets worth $ 91 billion.

CNBM Group consists of 15 public companies, 26 research and design institutes, 33 national and industrial quality control centers, 11 state laboratories and technical centers, as well as 19 national standard committees. The state corporation is actively expanding its presence abroad.


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