| Project Detail |
The project proposed by Elektroprivreda Srbije (EPS) consists of the replacement and the upgrading of the monitoring and control system (mcs) of the Nikola Tesla B thermal power plant (TENT B) commissioned in 1985 (Unit B1 1983, Unit B2 1985) and currently producing one fifth of Serbias energy with 2x620 MW 3 stages steam turbines. The total budget of the project, estimated on the basis of budget offers, is 28.6 MCHF. EPS, the end beneficiary, is prepared to co-finance the project to a level of 63% (18.04 MCHF) of the value of the project; SECOs share is 37% (10.56 MCHF). This costs split results from a preliminarily agreed 50% minimum Serbian contribution, from SECOs budget frame for Serbia and from the projects scope and structure. EPS financing will be provided from internal funding. EPSs financial projection for the year 2007 shows a loss, but according to the EPS business plan 2006-10, a moderate profit will be made in the coming years. The project will be implemented under the Agreement of Technical, Financial and Humanitarian Cooperation between Serbia and Switzerland signed on 21.02.2003. It is fully in line with the Cooperation Strategy for Serbia and the Internal Country Strategy Note. A Project Trilateral Agreement (TA) will be concluded between SECO, the Ministry of Energy and Mining and EPS, based on the model of the National Control Center project agreement (project implemented by EPS), which covered the previous infrastructure project in Serbia. Background Reasons for the replacement are clearly the equipments age and its subsequent financial and ecological costs: the system is now fully outdated in respect of its reliability and performance. The pollution emissions (SOx, NOx, CO2, ashes) are increased because of sub-optimal operating conditions. The risk of outage due to a breakdown and to the unavailability of spare parts has increased in the recent years. EPS financing will be provided from internal funding. EPSs financial projection for the year 2007 shows a loss, but according to the EPS business plan 2006-10, a moderate profit will be made in the coming years. The investment scheduled for TENT B will not affect the sustainability of EPS. SECOs grant contribution to the project is justified for the following reasons: (a) Impact on EPS investment schedule for energy efficiency and environmental projects. The grant has a clear trigger effect. (b) The grant allows a Swiss technology transfer to EPS in a timely moment. (c) EPS has only limited access to other sources of financing, considering that the project is only marginally economically viable. Objectives The project is closely related to the sector policy dialogue on energy efficiency and environment, in which the COOF participates. It is a significant contribution to the objectives of the Serbian energy sector development strategy and to the enforcement of the legal framework for environmental protection. Swiss cooperation is thus well positioned is this key area for policy dialogue with the Serbian Government, together with other major donors such as Kreditanstalt für Wiederaufbau (KfW) and World Bank (WB). Medium-term outcomes Key outcomes of the project are : 1) the energy efficiency increase of the plant by 0.75% (estimation based on comparable projects) 2) the reduction of the emissions of pollutant gas, including emission of green house effect gas CO2 3) increased reliability of the power plant. Furthermore, the new mcs is a pre-investment for the installation of filters to be financed by KfW and EAR. |
