Rijeka District Heating

Location:

Croatia

Project number:

45213

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

10 Dec 2013

Status:

Repaying

PSD disclosed:

06 Sep 2013

Translated version of this PSD: Croatian

Project Description

The EBRD is considering financing a new combined heat and power plant (“CHP”) with a planned capacity of 20 MWt and 3 MWe. The electricity produced in the CHP plant will be sold to the national grid operator and heating and/or cooling to the University of Rijeka Campus, the City of Rijeka General Hospital as well as a number of residential buildings.

Transition Impact

The transition impact of the proposed transaction will be achieved through:

  • Improved operating performance of the Company, and adherence to the best applicable procurement, environmental and financial reporting standards.
  • Introduction of an adequate and transparent tariff formula and its inclusion into the Public Service Contract
  • Exploring the potential for further privatisation of the Company

The Client

Energo d.o.o. Rijeka (the “Borrower” or the “Company”) is a utility company incorporated in Rijeka, Croatia, providing three types of public services: gas distribution, district heating and street lighting.

The Company is majority (56.9 per cent) owned by the City of Rijeka, while the remainder of the ownership is split among Amga Udine (Italian utility company) with 34 per cent of ownership and Croplin (joint venture of German EoN and Croatian oil company INA) with 9.1 per cent.

EBRD Finance

Senior loan of up to EUR 10 million to the Energo d.o.o. Rijeka.

Project Cost

Up to EUR 10.7 million.

Environmental Impact

The project has been categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The priority investments into the rehabilitation and modernisation of the district heating infrastructure are expected to bring environmental and social benefits associated with the overall improvement in the quality of heating and hot water services, improved energy efficiency, reduction in fuel consumption and heat and water losses, and lower air emissions.

Independent due diligence has been done by an international consultancy. It includes a review of the Company’s corporate environmental, health and safety and social management capabilities and procedures in relation to its own workforce and construction contractors, and an analysis of the environmental and social impacts and benefits of the proposed investment to establish the level of project's compliance with EBRD's Performance Requirements (PRs).

Due diligence has identified a number of actions required to be addressed by the company to meet EBRD requirements and an action plan has been developed. The action plan includes items such as increase in capability and capacity to manage environmental and social issues and to develop management systems aligned with international standards - while maintaining local regulatory compliance. In addition, issues associated with occupational health and safety, contractor management, waste management and development of sustainable procurement policy are to be adopted by the company.

The above action plan has been incorporated into an Environmental and Social Action Plan (ESAP) has been developed by the consultant and reviewed by EBRD, which includes corrective actions and mitigation measures for identified issues to ensure that the company meets the EBRD requirements. In addition, a Stakeholder Engagement Plan (SEP) has been developed and approved by the Client. The Client agreed to implement the ESAP and SEP and submit annual environmental and social reports to the Bank.

Technical Cooperation

The following technical co-operation (“TC”) assignments are a part of this project:

Pre Loan Signing

  • Environmental and Social Impact Assessment of the Project in the amount of EUR 30,000, financed from the Bank’s own resources.
  • Technical Preparation of the Project Assessment in order to support the technical due diligence of the Project, in the amount of EUR 30,000, financed from the Bank’s own resources.

Post Loan signing

  • Project Implementation Support and Financial and Operational Performance Improvement Programme (FOPIP) to support the Project Implementation Unit of the Company with project implementation and assisting the Company (through the FOPIP) with commercialisation, including improved cost efficiency, long-term planning, building and implementing a cost recovery tariff model and preparation of the Public Service Contract. The estimated cost of the assignment is EUR 300,000, proposed to be financed by an international donor.
 

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.