Integration of two district heating systems into a single interconnected system and modernisation of a production plant
Each DemoUkrainaDH project undergoes the following steps:
- Indication of Interest. Indication of Interest is prepared by municipal district heating companies. As of 2019, no new Indications of Interest can be accepted.
- Review and Assessment of the Indication of Interest. Review and assessment of the Indication of Interest is performed by the Coordination Consultant. During the assessment process, the Consultant provides feedback to the contact persons stated in the IoI, and requests any additional information required to finalise the assessment.
- Approval for Support for Project Preparations. Indications of Interest recommended by the Consultant are presented to the programme’s Evaluation and Monitoring Committee for approval. The decision to proceed with the business plan development is taken at this stage.
- Preparation of a Business Plan. A business plan for the project is prepared by the Project Management Consultant. The district heating company provides assistance and information to the Consultant. In parallel with the preparation of the business plan, NEFCO performs a financial due diligence of the City and its DH company, to define the credit worthiness and the city’s ability to provide a municipal guarantee for the loan. The City and its DH company shall also establish a Project Implementation Unit (PIU), responsible for the operational implementation of the project.
- Approval of the Business Plan. Business plan results and outcomes of the financial due diligence of the city and its DH company are discussed by NEFCO’s Investment Committee. In parallel, the City and its DH company approve the business plan. Approval of the business plan initiates the preparation for project implementation.
- Preparation for Implementation. The business plan forms the basis for the City Council to issue the municipal guarantee for the prospective loan. This is subject to approval by Ukrainian national authorities, such as the Ministry of Finance.
- Signing of Financing Agreements. Once all approvals are in place, the financing agreements constituted by a loan agreement, a grant agreement and a guarantee agreement, are prepared for signing.
- Project Implementation. Project implementation activity can be divided in sub-activities that follow in subsequent order. The sub-activities are: training the PIU, preparation of tender documents, procurement, tender evaluation and signing of contract will be performed before the implementation at site. The PIU is assisted by the Project Management Consultant during the entire implementation process.
- Project Completion and Loan Repayment. Once implemented and in full compliance with the financial agreements, the DH company proceeds with the repayment of loan to NEFCO. This is accompanied by regular reporting, as outlined in the financial agreements.
Donors and financiers
Nordic Environment Finance Corporation
Eastern Europe Energy Efficiency and Environment Partnership
Project management consultant for the programme
Coordination consultant for the programme