Andrey Devyatkov: Constructing Transnistria’s image: from smuggling to electricity schemes

The image of Transnistria in the Moldovan discourse used to be discredited earlier due to stories about smuggling of weapons, people and drugs through the territory of this unrecognized state. The EUBAM mission clarified the situation in 2006: smuggling hardly went beyond cigarettes and chicken legs. From beginning of 2015 the situation changed: Transnistria began to be associated predominantly with electricity supplies which have allegedly benefited politicians and businessmen both from Chisinau and Tiraspol by using commercial factoring company Energokapital with some offshore background. This scheme was one of the key examples of corruption often mentioned by representatives of right-wing opposition during the current presidential campaign in Moldova.

At the end of 2014 Ukraine, having become a key electricity provider for Moldova one year earlier suddenly cut off its supplies. Moldova was enforced to turn back to its traditional supplier – Kuchurgan power station located at the left bank of Nistru river. But instead of signing a direct contract between two economic agents (like it used to be before) the company Energokapital was included in the supply scheme as a commercial factoring company. Very soon the information was published at a Transnistrian Internet resource openpmr.info that this company was established on behalf of the Transnistrian president Engeny Shevchouk. One year later the Transnistrian deputies from party “Obnovlenie” directly accused Shevchouk of siphoning financial resources of Transnistrian state companies by using intermediary agents, including of Kuchurgan power station which allegedly lost in this way 38 million dollar only in 2015.

These arguments were also taken over by Moldovan expert community (i.a. Sergiu Tofilat) and many mass-media. The interests of the Moldovan public grew due to the fact how Energokapital became the key supplier for Moldova having practically pushed Ukraine out of the Moldovan market. Firstly, this company proposed in November 2014 the price of 6,795 cent per 1 kW/h while Kuchurgan power station drew on traditional 6,8 cent. Such a small distinction reveals that both suppliers (while Energokapital borrows electricity from the same Kuchurgan power station) agreed on prices before that. Secondly, when in February 2016 the contract had to be signed for the period till April 2017 the open tender was most likely manipulated. The contract with Energokapital was concluded before the official tender position was closed. Besides, Ukrainian companies which tried to return to the Moldovan market argued that they were ready to deliver a smaller price for electricity but were practically excluded from the competition. Not to forget is that international journalists began to draw particular attention to electricity supplies to Moldova because they had been one of the key issues in the context of the protest wave in the country in 2015. And they allegedly found out that siphoning of Energokapital money took place in the same way and by using even the same companies as it was the case with notorious “billion-dollar bank theft” scandal.

At the end the story began to remind of the situation with the company Rosukrenergo which was an intermediary agent for gas trade between Russia and Ukraine in 2006-2009. The key feature of such companies is that they practically get rid of any substantial state control and are treated as commercial agents which may use off-shore schemes and get profit while the tariffs for the population can increase at the same time.

The Transnistrian government argues that due to the cooperation with Energokapital (which by the way is registered in the Moldovan legal area) Transnistria managed to increase the export of electricity to the right bank. The official statistics confirms that: while the energy export grew from 167 million dollar in 2014 to 227 million in 2015 the tax revenues coming from Transnistrian companies producing and exporting electricity increased in the same period by 60 %. Not to forget is that electricity accounts for about one third of the whole Transnistrian export. In fact only this branch grew last years while the others suffered from dramatic downfall.

At the same time it seems that the Transnistrian side plays a subordinate role in this trade scheme. Thus the price was decreased to 4,89 cent in March 2016 what allowed the Moldovan government to diminish the electricity tariff for population by 10 % and to present to the Moldovan public its own results in bringing socioeconomic stability for the country.

It is difficult to find out who is the beneficiary of this scheme or whether there is one. This issue has been heavily politicized, including by those who opt for building electricity interconnectors between Romania and Moldova. In the short-term perspective Transnistrian budget and economy are benefiting from this deal but in the long run the image of the Kuchurgan power station turns out to be heavily damaged. Many Moldovan professionals used to acknowledge that this factory had always been a stable and faithful supplier for the right bank despite all political circumstances. But now the Moldovan government will face more and more pressure aimed at cutting off this traditional supply route only due to political reasons.

At the same time it should be mentioned that diversification of  energy supplies is good for the country’s national security and socioeconomic development but one dependence should not be replaced by another one (be it on Ukraine or Romania in the Moldovan case).