Funding is once again being sought for the construction of the Kaniv Pumped-Storage Power Plant: how should the foreign funds be spent?
19 August 18:43
ANALYSIS FROM 
Ukraine does indeed want to build the Kaniv Pumped-Storage Power Plant, whose stated storage capacity is expected to add stability to the beleaguered Ukrainian power grid. Or, more accurately, to complete it, since work at the site of the future plant began more than 40 years ago. "Komersant Ukrainian" investigated who will be involved in completing the project and how it will be done.
The history of the Kaniv Pumped-Storage Power Plant dates back to the 1980s. But the more than 40 years that followed were marked not so much by the amount of work completed as by bureaucratic approvals, political promises, public protests, and attempts to resume construction. The latest such attempt was announced this summer.
A process spanning several decades
Construction of the Kaniv Pumped-Storage Power Plant began in 1984. But by 1991, work had already come to a halt due to a moratorium. In the early years of independence, Ukraine had other priorities than such megaprojects. By the time construction was halted, the excavation for the upper reservoir had been completed, roads had been built, and the residents of the village of Buchak, located within the construction zone, had even been relocated.
However, according to those who enjoy traveling through the Cherkasy region, there are still a few old cottages in the village of Buchak today, and vacationers can be found there every summer. This is especially true given the presence of Lake Buchak nearby, which formed on the site of one of the excavation pits dug during the construction of the Kaniv Pumped-Storage Power Plant.
The first attempt to resume construction dates back to 1999, when the moratorium was lifted, and PJSC “Ukrhydroenergo” was tasked with developing a construction project for the plant in accordance with the refined needs of Ukraine’s isolated power grid. The next 20-plus years were spent obtaining approval for feasibility studies, developing updated project documentation, securing environmental impact assessment reports, and obtaining permits for construction work.
Incidentally, neither the conclusions of the Ministry of Ecology nor the Kaniv Pumped-Storage Power Plant project itself convinced environmental activists of the feasibility and safety of the construction, and they regularly opposed it, arguing that there are currently better alternatives to such plants in the form of renewable energy sources.
An investment project for the construction of the Kaniv Pumped-Storage Power Plant was also developed in 2019, and attempts were made to secure international financing. However, these efforts proved unsuccessful. And now, the Agency for Public-Private Partnership Support has recently announced what is essentially yet another attempt to secure such funding.
As reported to the publication "Komersant Ukrainian", PJSC “Ukrhydroenergo,” the initiator of the Kaniv PSP construction project, has signed a Memorandum of Cooperation with the Agency, and preparations are underway for a Cooperation Agreement. This will involve further development of technical specifications to update the project documentation for the Kaniv Pumped Storage Power Plant. The plan is to modernize sections of the project documentation and prepare the documents necessary to attract funding from international financial institutions.
This work will be carried out within the framework of the Ukraine Government Project Preparation Facility program, which focuses on the preparation of public investment projects in Ukraine and is implemented by the Agency for Public-Private Partnership Support with the support of the World Bank.
Energy Balance Above All
The Kaniv Pumped-Storage Power Plant, with its highly flexible generating capacity, is intended to help ensure the balance and reliability of Ukraine’s integrated power grid. Such pumped-storage power plants store electricity when demand in the power grid is low and release it when the load rises to peak levels. For example, in the case of the Kaniv Pumped-Storage Power Plant, water will be pumped into the upper reservoir at night, and in the morning and evening—that is, during peak load periods—it will be released into the lower reservoir, increasing electricity generation and thus helping to balance the power grid. Furthermore, such a reserve of electricity can, if necessary, increase the Ukrainian power grid’s export capacity.
It is known that the very first project for the construction of the Kaniv Pumped-Storage Power Plant called for the installation of 16 hydroelectric units with a capacity of 3,600 MW. In 1999, these plans were revised and adapted to the country’s capabilities. It was decided to reduce the number of units to 4 and the plant’s designed capacity to 1,000 MW.
According to PJSC “Ukrhydroenergo,” “as of today, no change in the plant’s total capacity is anticipated, and in accordance with the previously approved project, it will be 1,000 MW in generator mode.” However, updates to the project are inevitable.
“In light of the military aggression by the Russian Federation, we are exploring ways to adjust the project to enhance the pumped-storage power plant’s capabilities for regulating frequency and capacity in the power grid, options for modifying the layout and design of the pumped-storage power plant’s main structures, as well as increasing the level of protection for these structures against external influences,” as noted in Ukrhydroenergo’s response to a request from the publication "Komersant Ukrainian".
In an interview with LIGA.net two years ago, Ihor Syrota, then-CEO of Ukrhydroenergo, explained exactly how they might attempt to increase the level of protection.
“We are making changes to the construction project for the Kaniv pumped-storage power plant. It must be out of reach for the enemy. Therefore, there are plans to build it underground,” the official said.
Responding to a question from the publication
“This issue is relevant and is currently under consideration, as measures are currently being taken to adjust the project in order to increase the level of protection of the facility (buildings and structures) from external influences.”
Incidentally, burying the plant underground could increase the project’s implementation costs. In 2024, the company’s then-CEO, Ihor Syrota, estimated that the cost of the Kaniv Pumped-Storage Power Plant could range from $1.5 billion to $2 billion. In an interview with Forbes, he explained these estimates as follows:
“There is no exact figure yet, but cost indicators are roughly the same worldwide: if in Europe the construction of one kilowatt of a pumped-storage plant costs $2,000, then 1,000 megawatts would be in the range of $1.5–2 billion.”
At the same time, the official clarified that the price may vary depending on location and technical solutions.
Not Just the Kaniv Pumped-Storage Plant
Construction of the Dniester Pumped-Storage Power Plant began almost simultaneously with that of the Kaniv Pumped-Storage Power Plant. But its prospects are looking better.
A representative of PJSC “Ukrhydroenergo” told the publication "Komersant Ukrainian" that, according to the project, the plant is to have 7 hydroelectric units with a total capacity of 2,268 MW in generator mode and 2,947 MW in pump mode. As of today, the construction of hydroelectric units Nos. 1–4 has been completed, and they have been commissioned, with a total capacity of 1,296 MW in generator mode and 1,684 MW in pump mode.
Once it reaches its design capacity, the Dniester Pumped-Storage Power Plant is set to become the most powerful pumped-storage plant in Europe.
According to “Ukrhydroenergo,” one of the key elements of post-war reconstruction will be the restoration of the Kakhovka Hydroelectric Power Plant.
“The reconstruction of the Kakhovka hydroelectric complex will not only restore the lost generating capacity of the Kakhovka Hydroelectric Power Plant (343.2 MW) and provide the Ukrainian Integrated Power System with highly flexible reserves, but also ensure the necessary water level for cooling the Zaporizhzhia Nuclear Power Plant, eliminate operational restrictions on the units of the Dnipro Hydroelectric Power Plant, restore the water balance and help stabilize the ecosystem of the lower Dnieper, ensure the functioning of irrigation systems, and support agricultural production, among other things,” Ukrhydroenergo notes.
It is clear that the practical implementation of the project will be possible only after the territory is liberated. According to preliminary estimates, construction could take approximately 6–7 years once work begins.
