Improving heating services in Russia

The EBRD has conducted a feasibility study to modernise the city of Velikyi Novgorod’s heating system.

The city of Velikyi Novgorod in Russia relies on the municipal district heating company for the provision of heat and hot water. The company serves 98 per cent of the population, supplying at least 3,000 buildings, including more than 1,600 residential properties and 760 public establishments such as schools, hospitals and kindergartens.

Upgrading infrastructure for reliabity and cost efficiency

The obsolete supply infrastructure needs costly rehabilitation and upgrading in all parts of the production cycle, which demands substantial investments. The EBRD in cooperation with the Northern Dimension Environmental Partnership (NDEP) is considering co-financing of the heating company for a priority capital investment programme to ensure Velikyi Novgorod population can count on a reliable, cost-efficient and environmental heating supply system.

Preparing a long-term investment plan

In order to help the Bank prepare a strategic priority investment programme and a long-term investment plan, in 2010 the government of Canada financed a comprehensive feasibility study for the modernisation of the city’s heating system. The study, which was conducted through th benchmarking of the district heating service against the sector’s international best practices, assessed the present heating system in both technical and financial terms. It analysed heat generation and distribution networks, green house gas emissions and it estimated current heat losses and energy consumption performance. It also established at which levels tariffs would be affordable to users and recommended a tariff setting policy to ensure adequate billing and subsidy payments.

The findings of the feasibility study will help the Bank appraise the project for the prospective loan that will increase energy efficiency through reduced fuel, electricity, hot water consumption, reduced maintenance and operation costs as well as improved quality and consistency of the heat and hot water services in the city of Novgorod. The project will serve as an example of comprehensive district heating system rehabilitation with modern technology and will show the right way forward.