In April 2023, the Ukrainian government and Japan International Cooperation Agency (JICA) signed grant agreement within the Program of Emergency Recovery (phase 2). Its sub-project # 3 has focused on emergency improvement of energy supply in Ukraine. The plan has been simple: the Japanese government finances, international procurement agent buys, the Ukrainian factory manufactures necessary energy equipment and the Ministry of Energy of Ukraine (as an executive agent) transfers the equipment to the Ukrainian company providing energy supply & distribution. Transformers to replace damaged equipment in Kherson oblast have been purchased within this grant agreement.
However, five high voltage and thirty one low voltage transformers have not yet been supplied! More to that, their supply depends upon a chain of lawsuits between the Ministry of Energy and private energy distribution company JSC «Khersonoblenergo», part of the group of companies VS Energy.
For residents of Kherson oblast, availability of electricity is about physical survival, not about comfort. Having survived through the Russian occupation and the blast of Kakhovka Hydro Electric Station on Dnipro River, they have suffered from daily Russian shelling and drone attacks since the end of 2022. So urgently needed equipment has been already manufactured and stored in warehouses of manufacturers since 2025. Why its transfer and installation became the subject of continuous court debates? Why it failed to support water pumps, hospitals and defenders of frontline oblast? In order to understand the situation, let us look at the chronology of events.
Japanese government appointed Crown Agents Japan Limited as an independent procurement agent. The procurement process has been open and transparent. Crown Agents Japan Limited signed contracts with suppliers in April-June 2024 for the supply of transformers and materials for JSC «Khersonoblenergo», included into the list of recipients of the Program of Emergency Recovery. «Khersonoblenergo» received materials (insulated and non-insulated wires, electric insulators, reinforced concrete columns, cars), purchased within contracts, by February 2025.
According to contract from 27.06.2024, five high voltage transformers had to be manufactured and supplied by Ukrainian JSC «Zaporizhtrasnformator» and thirty one low voltage transformers – by LLC «Eliz». However, «Khersonoblenergo» has not yet received them!
As the company indicated in its lawsuit, «Zaporizhtransformator» did not answer its inquiries about time schedule of supply of transformers. The Ministry of Energy of Ukraine, headed at that time by infamous German Galuschenko, informed on May 2, 2025 about its refusal to transfer the equipment.
In June 2025, People’s Deputy of Verkhovna Rada of Ukraine from Kherson oblast Sergii Kozyr asked Galuschenko during the session of parliamentarians’ questions to the Cabinet of Ministries of Ukraine – why transformers have not reached energy company and who was responsible for the delay? The Minister answered that he did not want to go into details and persuaded – «the issue of transformers has been already settled.
The Minister should have explained the issue publicly, in order to refute accusations of blocking «humanitarian assistance» to Kherson residents and «misuse of Japanese aid». In that case, Galuschenko had to admit that his subordinates did not prepare necessary legislative documents for the implementation of the final phase of agreement – supply of the equipment to the recipient. But he failed to do it.
Transformers in Kherson oblast damaged by Russian troops. Photo: Facebook / JSC «Khersonoblenergo»
Signs of professional incompetence of Galuschenko’s subordinates (if not malicious intent) can be traced in four amendments to point 5 of the Order of Use of Funds provided by agreements between JICA and the Ukrainian government within the Program of Emergency Recovery (I and II phases) approved by the Decree of the Cabinet of Ministries of Ukraine # 1021 from September 22, 2023. These amendments were introduced within two years.
The Order, amended in October 2024, stipulated that «created, improved, repaired, modernized, received after implementation of the Program objects of movable or immovable property remain in state and\ or municipal ownership and should be purposefully used». The Ministry of Energy was allowed to transfer these assets to enterprises, organizations or bodies under its management. At the same time, it was not allowed to alienate these objects of state or municipal ownership.
In practice, this regulatory framework did not allow the Ministry to transfer to private JSC «Khersonoblenergo» into its private ownership Japanese «humanitarian aid» – 36 transformers owned by the state. This transfer has been illegal.
On the other hand, such framework made impossible any transfer of above mentioned transformers from the Ministry to the final recipient – «Khersonoblenergo».
(It is not yet clear why materials bought under this agreement – wires, columns, cars etc. – were directly transferred to the final beneficiary without any reservations).
In June 2025, the Ukrainian government introduced further two amendments to point 5 of the Order. The government expanded the list of legal entities which can receive the assets within the Program and added municipal enterprises and companies not related to the sphere of management of the Ministry of Energy but having over 50% of stated owned shares.
On June 27, 2025 (in four days!), the Ukrainian Cabinet of Ministries issued another amendment which allowed transfer of Japanese transformers to the Ukrainian private company:
«During the martial law and one year after its suspension or cancellation, objects of the equipment for energy supply can be transferred into the lease to state and municipal enterprises, institutions and organizations as well as other business entities involved into transfer, distribution and production of electric and heating energy…»
After approval of this amendment, the Ministry of Energy was allowed to do something with transformers already stored in warehouses. On the day of this amendment, the Ministry issued its order # 250 and transferred transformer (16 000 kVA, 150\35\6 kW) with recommended spare parts to state owned enterprise «Regional electric networks» («REM»).
In August 2025, the Ministry transferred four high voltage and 31 low voltage transformers to state owned enterprise «ДПК «МАСМА» [MASMA], as Anatolii Kutsevol, Deputy Minister of Energy of Ukraine on European Integration, reported in his answer to our information request. It is unclear why the Ministry transferred them to its fuel company which has nothing to do with electric grids, their servicing or repair. That is why we are going to submit another information request and find out what «MASMA» did with transformers it received.
Відповідь міністерства енергетики України на запит РихтунAnswer of Anatolii Kutsevol, Deputy Minister of Energy of Ukraine on European Integration, to the information request of Tetyana Rykhtun, CJI
On August 28, 2025, state owned «REM» and private JSC «Khersonoblenergo» signed leasing agreement about transformer TDTN-16000/150/35/6-U. The leasing payment of 1 UAH was determined by the Ministry. It should be emphasized that this transformer is the real «heart» of the power station. It is the bridge between high voltage electric grid and local distribution grids of the city.
But it is only one out of five high voltage transformers purchased within grant agreement and finally transferred to the company-recipient!
It was likely that the transfer was exercised by the Ministry under the pressure of the lawsuit of «Khersonoblenergo» submitted against the Ministry to Odessa District Administrative Court. Finally, the court closed its consideration.
What happened with other transformers? As of the end of March 2026, leasing agreement between «MASMA» and «Khersonoblenergo» about them has not yet been signed (leasing payment – 1 UAH).
More to that, the company refused to lease them! As Anatolii Kutsevol answered us, «Khersonoblenergo» informed the Ministry by the letter from 24.03.2026 that «it refuses to lease above mentioned transformers as there is no need for this equipment because company’s respective needs were satisfied by resources of the Fund for Support of Ukrainian Energy».
What a surprise! The Fund for Support of the Energy of Ukraine was set up in 2022 upon initiative of the Ukrainian Ministry of Energy and European Commission. It collects financial donor aid from EU and over 35 countries. Thus, one hand of the Ministry signs an agreement for the supply of 36 transformers with Japanese government and does not know that other hand of the same Ministry can also supply them?!
«Khersonoblenergo» did not answer our information request but we called company’s lawyer Vadym Anisimov. He confirmed the supply of transformers within another program of international assistance. As he says, the issue has been already settled. We asked whether transformers were already delivered and whether they were leased. The lawyer answered: «Everything is in the process».
Office building of JSC «Khersonoblenergo» damaged by Russian shelling, 2026. Photo: investigator.org.ua/ Petro Kobernyk
So, we will keep following this process. The case with Japanese transformers is bad diagnosis for the Ukrainian governance. There is a paradox: international partners allocate millions of USD, Ukrainian factories manufacture necessary equipment whereas Ukrainian public officials slow down its delivery to recipients because they fail to develop legitimate legal grounds for its transfer. It is clear that mechanism of receiving and transferring technical aid should have been already fully developed. It is also clear that public officials do not cope with events and take necessary decisions only under the pressure of external circumstances like lawsuits or requests from international donors.
On the other hand, we should note that energy equipment cannot be treated as usual «humanitarian aid» as «Khersonoblenergo» attempted to present in its lawsuits. The company will use transformers to generate profit and not for «humanitarian» supply of electricity to Kherson consumers. Ukrainian legislation clearly stipulates the transfer of state owned assets into private ownership. In this case, it does not matter that final beneficiaries of «Khersonoblenergo» are sanctioned Russian citizens Babakov. Giner and Voevodin (though their rights have been registered by fake owners with passports of EU countries).
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