LVIV DISTRICT HEATING PROJECT

cancelled

Rehabilitation and commercialisation of the Lviv City district heating supply service. Project objectives: Increase energy efficiency of district heating in Lviv and improve the financial performance of Lviv Teplokomunenergo. Foster commercialisation of the district heating service; rehabilitate and modernise the district heating system; increase private sector participation in provision of heat supply services. The project is sponsored by the Lviv Regional State Administration. The client is Lviv Teplokomunenergo, a state-owned enterprise responsible for the district heating distribution network in Lviv city. Sovereign guaranteed loan for US$ 37 million (ECU 33 million). Additional funding could be provided by international donors. US$ 45 million (ECU 40 million equivalent). The project has been classified as B/0, requiring an environmental analysis to determine the potential environmental impacts, both positive and negative, and to establish compliance requirements with relevant national, EU or World Bank standards. The project is intended to improve the existing district heating service of the city of Lviv in western Ukraine and to transform it into an efficient business run on commercial principles. Commercialisation of the district heating services will include the involvement of private energy savings companies which will act as agents in installing and maintaining meters, billing and collection. The proposed loan would predominantly be used for the installation of metering equipment and pre-insulated pipes to replace old and leaking pipes supplying heat to apartment buildings. Additionally, modifications to the pipework in apartment buildings would also be made to reduce the wastage during heat distribution within buildings. The implementation of the project would result in a significant energy efficiency improvement and indirect positive impact on the environment. It would improve the efficiency of the heat distribution system by: (i) reducing losses though leaking pipework and lack of control equipment, and by (ii) introducing a demand-led service with proper metering and billing. This will not only improve social conditions, but will also improve resource use at the actual district heating plant and reduce emissions from the gas-fired boilers. According to the Lviv Region District Heating Planning Study, prepared by Gothenburg Energi International AB, the estimated reduction in CO2 and NOx emissions after achieving the assumed energy savings are remarkable. However, the infrastructure refurbishment, replacement of underground pipes, modifications in buildings and installation of metering equipment may cause some temporary disturbance in the form of dust, noise, traffic congestion and inconvenience. National or local requirements for public participation will be identified in the environmental study and will be met. The accompanying TC project will identify the relevant environmental and health and safety issues, and that this will be fully considered in project planning. Feasibility study funded by Swedish contributions to the EBRD's Technical Cooperation Fund is under implementation. Further funding is being sought for development of accounting systems and financial controls within Lviv Teplokomunenergo.