EBRD loan for upgrade of Pale heating

By Axel  Reiserer

The EBRD is supporting the modernisation and expansion of Gradske Toplane Pale, the provider of district heating in Pale, with a loan of up to €4.5 million. The loan will be used for the acquisition of a new biomass boiler and the reconstruction and extension of the heat distribution network. The utility serves commercial, public and private customers in the municipality of Pale, located in the eastern part of Bosnia and Herzegovina.

In addition to the EBRD funds, the investment will also be supported by a grant of up to €1.5 million from the European Western Balkans Joint Fund under the Western Balkans Investment Framework. The loan is also co-financed by a grant of €0.5 million from the EBRD Shareholder Special Fund. Pre-signing Technical Co-operation support for a feasibility study in the amount of €200,000, as well as the post-signing support for design and implementation in the amount of €600,000 has been provided by the Government of Austria.

The project will include the introduction of modern, compact individual heating substations equipped with heat meters at the level of the buildings and the introduction of heat metering at the apartment level, together with the installation of thermostats on each radiator. It will support the development of the company by improving energy efficiency, extending its services to new consumers and improving the quality of services (i.e. increased capacity of heat supply, and individual metering of heat consumption).

Libor Krkoška, head of the EBRD office in Sarajevo, said: “This investment represents a major step towards the improvement of heating services in the municipality of Pale both in terms of supply and of energy efficiency. The municipality covers a large, mostly mountainous area which is challenging to serve. With the new investments the company will be well prepared for a successful operation.”

Nikola Spiric, Minister of Finance and Treasury of Bosnia and Herzegovina added that locally available biomass, mostly waste from wood processing industry, and modern technology will enable Gradske Toplane to provide high quality services at competitive prices. The project will contribute significantly to prevention of air pollution in Pale thus facilitating development of tourism in the municipality.

To date, the EBRD has invested more than €1.6 billion in some 110 projects in Bosnia and Herzegovina, with a focus on infrastructure development, support for small and medium-sized enterprises and strengthening the financial sector.