Transition Capture: The Story of Rent-Seeking and Corruption in the Formative Years of Ukraine's Renewable Energy Industry

This text examines the intersection of political influence, economic interests, and the development of Ukraine's renewable energy sector, focusing on the role of key political and business actors. It highlights the rise of oligarchic structures in the 1990s, which shaped the country’s political economy, with figures like the Klyuyev brothers leveraging their political positions to build a business empire that included significant investments in solar energy through companies like Activ Solar. Policies such as the Feed-in Tariff (FiT) system, designed to incentivize renewable energy, were instrumental in their success but also exemplified how state support could be exploited for personal gain. This case study highlights the dual nature of state-supported renewable energy frameworks in a transitioning economy. While such frameworks can drive substantial growth and attract investments, they are also vulnerable to exploitation by politically connected elites. The Ukrainian experience underscores that the energy transition is not just a technical shift but a deeply political and institutional process. Ensuring equitable access, fostering public trust, and addressing socio-political dimensions are as critical as deploying renewable technologies. For countries navigating similar challenges, Ukraine’s lessons can help align renewable energy policies with broader goals of sustainability, equity, and resilience.