PROPOSED U.S.-UKRAINE BILATERAL ENERGY SECURITY

C O N F I D E N T I A L STATE 103668 SIPDIS E.O. 12958: DECL: 10/04/2019 TAGS: EAID ECON ENRG EPET KNNP PGOV PREL UP SUBJECT: PROPOSED U.S.-UKRAINE BILATERAL ENERGY SECURITY WORKING GROUP Classified By: Classified by Lawrence Silverman for reasons 1.4 (b) and (d). ¶1. (SBU) Summary: This is an action request. Post is requested to contact the Government of Ukraine, both MFA interlocutors and other GOU agencies with direct authority over energy issues, concerning the modalities and timing for the first meeting of the U.S.-Ukraine Bilateral Energy Security Working Group (BESWG) within the framework of the Strategic Partnership Commission. The purpose of the message is to propose a date for the BESWG, determine who will chair the GOU's BESWG delegation, and present a tentative agenda for the initial meeting. End summary. ¶2. (SBU) Post is requested to contact the appropriate Ukrainian authorities and propose October 28 as the date of the next meeting of the BESWG. This would permit input from the initial meeting during the first meeting of the U.S.-Ukraine Strategic Partnership Commission, which will take place in Washington on October 29. ¶3. (C) Ambassador Richard Morningstar, the Department's Special Envoy for Eurasian Energy, will lead the USG delegation to the BESWG, with participation from the Department of Energy, USAID, State and other agencies. Washington agencies believe the Ukrainian delegation should be co-chaired by an official who has direct authority over GOU energy agencies, and therefore could engage more authoritatively with the USG on energy security issues and implementation. Accordingly, the Department requests that Post engage the GOU on creating a co-chair position to be filled by the appropriate interlocutor. ¶4. (SBU) The United States would like to propose for GOU consideration a tentative agenda for the BESWG's deliberations; we welcome GOU suggestions as to agenda. On gas sector issues, the USG would like to discuss conditionalities for EBRD/World Bank/EIB participation in energy sector reform, and GOU plans and commitments in the following areas: -- Legal and Regulatory Reform -- Restructuring and Unbundling -- Commercialization and Investment -- Market Structure and Rules -- Social Protection, Targeted Subsidies, and Energy Efficiency In the context of furthering the GOU's efforts to meet conditionality, the U.S. delegation would be willing to discuss current USG energy sector assistance and possibilities for additional technical assistance. ¶5. (SBU) The United States would also welcome the opportunity to discuss nuclear power, including the issues of nuclear fuel supplies and the disposition of expended nuclear fuel, in the framework of increasing energy security. ¶6. Action request: Post is requested to deliver the following agenda to GOU interlocutors and discuss dates and leadership of the BESWG: -- Overview of energy sector challenges -- Reform efforts in cooperation with IFIs -- Nuclear energy issues -- U.S. technical assistance to Ukraine ¶7. The Department greatly appreciates post assistance in this matter. EUR/UMB point of contact is Dan Hall, reachable on unclass email at HallDE@state.gov, class email at HallDE@state.sgov.gov, or phone at 202-647-5998. CLINTON