Harpen District Heating

Location:

Czech Republic

Project number:

11112

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Target board date:

31 Oct 2000

Status:

Completed

PSD disclosed:

10 Oct 2000

Project Description

The EBRD will provide financing to Harpen ?R, s.r.o, which leases, refurbishes and operates/subcontracts the operation of small district heating plants in the Czech Republic. These investments result in substantial energy savings, reduction of pollution, and improved quality of heating infrastructure for consumers. The loan will enable Harpen CR to rent, refurbish and manage the operation of selected district heating plants in the Czech Republic based on long-term off-take agreements with municipalities and consumers.

Transition Impact

This project finances critical investment in energy efficiency projects with an experienced private sector sponsor. It serves to further private sector participation in the financing and operation of municipal services in the Czech Republic. The project improves the basic infrastructure of the country by bundling many small heating projects while diversifying risk.

Plant refurbishment decreases energy consumption, leading to improved heat delivery to consumers at the same or reduced tariffs. With reduced energy consumption and frequently fuel switching, harmful environmental emissions are reduced.

The Client

Harpen ?R, s.r.o, is a 100 per cent owned subsidiary of Harpen AG, which leases and operates 180 district heating projects in Germany, Poland, Hungary and the Czech Republic. Harpen AG is owned by VEW Dortmund AG and Ruhrkohle AG. VEW has merged with RWE to create the largest private power utility in Europe.

EBRD Finance

Senior debt of up to CZK 600 million (€16.9 million). Co-lender is Commerzbank Prague.

Project Cost

Total projected cost over the three-year development period is CZK 1,300–1,400 million (€36.5–39 million).

Environmental Impact

The project involves the refurbishment of heating plants and was screened as B/1. An independent consultant provided a brief overview of the environmental issues associated with Harpen CR's operations in the Czech Republic. Its operations are limited to operating gas-fired district heating plants and heat transport, and thus have an overall limited impact on the environment. The company is in compliance with all applicable national regulations and the planned investments will bring it into full compliance with national and EU environmental standards.

The environmental issues and proposed mitigation measures include:

  • air emissions will decrease as a result of efficiency improvements and switching from coal to natural gas and energy transportation losses will be reduced from the present 40 per cent to 5-10 per cent, and the boiler losses from 10-15 per cent to 4 per cent;
  • water discharge issues will be insignificant, since there are no major water pollutants associated with gas-fired plant operations. The efficiency improvements will also bring about reduction in general water usage;
  • although there are no major risks associated with handling, storage and disposal of waste and other materials at Harpen CR's facilities, the company will ensure that all such activities are carried out in accordance with good industry practice;
  • health and safety issues are adequately covered in the company's guidelines and procedures.
  • Harpen CR will ensure that there will be minimum nuisance to local residents during building/upgrading of the plants and distribution networks; and
  • environmental liabilities associated with past contamination of sites are unlikely, as Harpen does not lease any site with a history of past contamination.

Technical Cooperation

None.

 

Business opportunities

For business opportunities or procurement, contact the client company.

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