Prijedor District Heating

Location:

Bosnia and Herzegovina

Project number:

45088

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

11 Nov 2014

Status:

Signed

PSD disclosed:

29 May 2014

Translated version of this PSD: Bosnian

Project Description

The EBRD is considering a loan in the amount of up to €7 million alongside potential investment grant in the amount of up to €2.0 million for construction of a new energy efficiency biomass boiler plant   including biomass preparation, storage and feeding.
 
The project will also include gradual modernisation of heat exchange substations and introduction of consumption based billing. The Project will be implemented by the Public Company Toplana AD Prijedor (“the Company”), a shareholding association majority owned by the City of Prijedor.

The Project should contribute to environmental protection and improve the quality of services in the City of Prijedor.

Transition Impact

The main transition impact rationale comes from implementation of cost-recovery tariffs and cost-effective business performance by the Company.

A. Framework for Markets: An arms-length service agreement between the City and the Company with the aim of setting service standards, efficiency indicators, automatic tariff adjustments and measures for bill collection will be prepared and signed.

B. Demonstration of new replicable activities: The project will target a reduction of energy costs, heat losses, switching to environmental friendly heating, and some other operational improvements expected as a result over time.

C. Improved standards for corporate governance: Financial disclosure and transparency backed by audited, IFRS accounts, covenanted improvement of transparency around funding of the Company with the overall target to improve the corporate governance standards.

The Client

The client is the Public Company Toplana AD Prijedor which is majority owned by the City of Prijedor.

EBRD Finance

Sovereign guaranteed loan in the amount of up to EUR 7 million.
 
An investment grant in the amount of EUR 2.0 million is currently being sought from the Swedish International Development and Co-operation Agency (“Sida”) to co-finance the Project.

Project Cost

€9.8 million, including TC grants.

Environmental Impact

Categorised B (ESP 2008). The independent environmental and social due diligence identified that the Project will result in significant environmental benefits. Such benefits include an improved air quality and reduction in CO2 emissions by approximately 80 per cent and will correspond to approximately 14,000 tonnes a year once the heavy fuel-oil is replaced by biomass. Other positive impacts include improved tariffs based on actual consumption; permanent and temporary employment opportunities during construction and operation of the biomass plant; training and capacity building for biomass boilers operators to be provided by the suppliers of equipment. Initial biomass availability study also identified that there are FSC certified biomass suppliers and other renewable energy sources produces (woodchip from sawmills; pellets, etc.).

There will be some temporary impacts during the construction related to renovation of building and public civil infrastructure that could be readily mitigate through an implementation of the HSE plan.

Ongoing operations of the Company are well managed and there is high level of environmental awareness. While some issues exist with regard to the waste management, lack of formal emergency preparedness plan, etc., which are triggered by lack of funds rather than unwillingness to implement required measures?

The draft ESAP contain actions aimed at developing corporate EHs structure, expand HSE training programme for employees; developing and implementing contractor management procedures; obtaining required environmental permits; developing waste management plan; implementing environmental monitoring programme; improving occupational health and safety procedures and arrangements; providing safe working condition to employees and contractors; improving safety signage; developing emergency preparedness plan; conducting EHS audit upon commissioning of the new plant; formalising employee and customers grievance mechanism and managing community impacts during the construction. The ESAP will need to be agreed by Final Review.

Technical Cooperation

Pre-signing

  • Feasibility Study, € 249,976, funded by the Swedish International Development Cooperation Agency (sida);
  • Procurement training and tender support, € 73,000, to be financed by an international donor;

Post signing

  • Project Implementation Support, including procurement, supervision and contract administration, € 400,000, to be financed by Sida.
  • Preparation of a financial and operational performance improvement programme and public service contract, € 150,000, to be financed by Sida.
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.