Pljevlja Renewable Energy Heating Project

cancelled

Translated version of this PSD: Montenegrin The EBRD is considering providing a loan to co-finance ing for an investment in the City of Pljevlja to enable the use of renewable energy (biomass from wood waste) for the heating of residential buildings together with an extension to the district heating system. The investments to be financed include the conversion of inefficient and obsolete, individual heating facilities which are currently fired with brown coal, to a ‘state-of-the-art’, centralised district heating system based on biomass. The new system will significantly enhance energy efficiency, reduce air pollution, and improve the overall quality of heat and hot water supply in the centre of the City. The majority of the heat supply is expected to be generated at boilers of a private sawmill. The project will demonstrate the benefits of an energy efficiency investment and a new approach to service delivery by utilising the best available techniques for low carbon district heating. The Project will deliver significant reductions in CO2 emissions. State of Montenegro. The project will be implemented by PROCON the national implementation agency for environment infrastructure projects in Montenegro. Once the project is finalised the Government will transfer assets to the Municipality of Pljevlja or to the municipal heating company, Grijanje.A Corporate Development Programme will help the recently established district heating company of Pljevlja (“Grijanje” or “Company”) in its development to the point where it can adequately manage the district heating system in the City. This Programme will also assist the reorganised district heating company with billings and collections as well as development of a transparent public service contract with clear performance targets. State of Montenegro. The project will be implemented by PROCON the national implementation agency for environment infrastructure projects in Montenegro. Once the project is finalised the Government will transfer assets to the Municipality of Pljevlja or to the municipal heating company, Grijanje. A sovereign loan of up to €4.0 million to the State of Montenegro. The total project cost is €6.5 million, which will be met by the EBRD loan and a grant from the EU Western Balkan Investment Framework. Categorised B. Impacts associated with this Project are site specific and can be readily mitigated with appropriate measures. An environmental audit and analysis were prepared, as part of the feasibility study, and submitted to the Bank for review. The studies conclude that the Project is associated with substantial environmental benefits resulting from replacing coal as a source of fuel and moving the boilers away from residential areas. The Project will improve air quality, result in energy savings and improve the efficiency of the service provided. The Project is not associated with significant negative environmental and social impacts although the will be some short-term local impacts associated with construction phase of the Project. An environmental and social action plan has been developed to address these, which has been agreed with the Company and will form an attachment to the loan agreement for this project. Actions are included to address impacts from dust and noise during construction, interruptions to water and heat supply services and waste management. The Company will be required to comply with the relevant EBRD Performance Requirements and ensure that the Project is structured to meet national and applicable EU environmental, health and safety standards. The Company will provide the Bank with an annual report on the implementation of the action plan and on any other environmental and social issues affecting the Project. The following technical co-operation funds are envisaged as part of this Project: • Corporate Development Support for the Company,. €200,000 to be financed by the EU Western Balkan Investment Framework; • Procurement Support to the Project Implementation Unit, Project Engineer and Supervisor of Implementation Works. €300,000 to be financed by the EU Western Balkan Investment Framework.