KIEV, April 9 - Ukraine’s largest mining and power generating company DTEK will become a key supplier of power to Moldova after defeating a Russian-owned regional energy company at an auction.

DTEK, which is owned by Ukrainian Rinat Akhmetov, partnered with Moldova’s state-owned intermediary Energocom to defeat the Kuchurgan Power Station, a Transdnistria power company owned by the Russian state-owned electricity giant, Inter RAO.

“The fact that Moldova switched from the Russian supplier in Transnistria to a Ukrainian company is significant in ways that go far beyond market economics,” according to The Jamestown Foundation.

The contract between Moldova and DTEK-Energocom consortium was signed for one year and the power will be delivered to Moldovan power distributors, the companies reported.

Moldova’s Ministry of Economy said the winning bid offered to sell power at $50.20 per megawatt/hour (MWh), compared to Kuchurgan’s offer of $54.40 per MWh.

“The decision took many by surprise, as the key figure in Moldovan politics—the head of the ruling Democratic Party, oligarch Vlad Plahotniuc—had a vested interest in maintaining the old contract despite accusations that importing energy from Transnistria not only legitimates, but also, in effect, sponsors separatism,” the Jamestown Foundation reported.

Ukraine had long sought to replace Russia on the Moldovan energy market, but to date, Chisinau had only used this as leverage with Moscow and Tiraspol. Moreover, the lucrative kickbacks from the Russian power company (about $19 million a year) were likely difficult to pass up.

Several factors had been making it increasingly difficult for the Moldovan government to continue with business as usual, according to analysts. For one, Transnistria does not pay Russia back for the Russian natural gas it consumes to produce electricity, passing the debt onto Moldova.

Second, the Russian aggression in Ukraine had alarmed the small country with a separatist region. And, last, but certainly not least, the election of a pro-Russian president has compelled Moldova’s government to forgo “business as usual” in order to mollify pro-Western Moldovans and the country’s development partners.

Having lost control over its large coal mines in the east, Ukraine is eager to compensate as much as it can by exporting power generated by its nuclear power stations.

DTEK Trading bought the export rights from Energoatom—a Ukrainian state enterprise that operates the country’s four nuclear power stations. (nr/ez)