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Targoviste Cogeneration and District Heating Municipal Project April, 2002

Understanding between Romania and Netherlands Regarding the Achievement of Joint Implementation Activities. Targoviste Cogeneration and District Heating Municipal Project April, 2002. The town was first mentioned by the bavarian crusader Johann Schiltberger in 1396.

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Targoviste Cogeneration and District Heating Municipal Project April, 2002

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  1. Understanding between Romania and Netherlands Regarding the Achievement of Joint Implementation Activities Targoviste Cogeneration and District Heating Municipal Project April, 2002

  2. The town was first mentioned by the bavarian crusader Johann Schiltberger in 1396. - Between 1396 - 1714 it used to be the capital of Romanian Country starting with Vlad the Impaler reign. - Until 1600 when Michael the Brave succeeded in achieving the first Union of the Romanian principalities, Targoviste remains the capital of Romanian Country. -Today ,Targoviste is the capital of Dambovita County - 98.000 inhabitants - Industrial potential- sheets and rolled goods of rustproof steel -special steels -light source facilities -laquers and dyes -lathes of different types ; oil-extracting equipement The City Of Targoviste Background

  3. Dutch – Romanian Joint Implementation Activities • On December 11,1997, Romania and The Netherlands signed The Kyoto Protocol regarding the reduction of emissions that are generating climate changes, especially the CO2 emissions. • The Romanian Government ratified the Kyoto Protocol on February 2001. ( Law No. 3 dated February,2001). • The Kyoto Protocol is stimulating the realization of Joint Implementations Projects in order to reduce the CO2 emissions whereby the investment result is the biggest one.

  4. Dutch – Romanian Joint Implementation Activities • In 1999, Romania , Bulgaria and Slovakia signed with The Netherlands a Memorandum of Understanding related to the realization of J.I. Projects through crediting and transferring the obtained CO2 emissions reduction to the Netherlands Government , reductions obtained between the years 2008 and 2012.

  5. CO2 emission reduction crediting and transfer ERUs= Emission Reduction Units ERUs Claims on ERUs ERU-PT Public Procurement COMENOR Emission Reduction

  6. Why J.I. Projects Fossil Fuel Generation and related Carbon Dioxide Emissions 2 TWh RO Mton NL CO2 kg CO /kWh 2 0 50 100 0 0,5 1 1,5

  7. Joint Implementation Projects Contracts & Agreements RO. Government Memorandum of Understanding NL- Government IFC Agreement of Cooperation NCC CL, TERMICA, NUON S.C. Comenor Târgovişte S.R.L. Engineering, Procurement & Contracting (EPC) Intretinere si Exploatare (O&M) PPA, HSA & GSA

  8. Romanian Benefits • Mitigation of Heat supply deficit in Targoviste City • Encouragement of other foreign investments in the municipality infrastructure • Improved air quality • Decrease of CO2 emissions • Complying with UE environmental standards

  9. Romanian Benefits • Utilization of the latest technology • Reducing fuel consumption,discharging the balance sheet. • Creating new skilled jobs in The City of Targoviste • Economic benefits: energy power cheaper than the alternative.

  10. J.I. Cogeneration ProjectsHistory • 1997: Preliminary Analysis: 11 projects (Sep) • 1998: In depth evaluation: 5 projects (NCC) • 1999 - 2000: Final Analysis: 2 projects (Cluj-Napoca and Târgovişte) • In cooperation with IFC (World Bank) • Financing analysis : ING Barings • Total costs: around € 40 millions (Cluj-Napoca) around€ 40 millions (Târgovişte)

  11. J.I. Cogeneration ProjectsHistory • Documentation submmited to SENTER by NUON and Termica in order to participate to the ERU-PT Tender • Octomber 2000: The project was selected to participate for the ERU-PT Tender • February 15th, 2001: The final proposal to SENTER • April 2001:The Minister of Economic Affairs of Netherlands agrred to award the offer with a contract concerning the generation and delivery of claims on 1.536.140 ERUs at a price of EUR9 / ERU for a total contract value of EUR 13.825.260 only after the following compulsory elements will be achieved:

  12. J.I. Cogeneration ProjectsHistory • A copy of the deed of foundation of the project company , including a specification of the shareholders and their share in the project company • A copy of the concession agreement in which the transfer of ERUs from the project company to NUON Warmte NV is specified • A proof of financial arrangements • A proof of credit and participation arrangements and a proof of insurance

  13. J.I. Cogeneration ProjectsHistory • A copy of The Environmental Impact Study • A copy of a letter issued by the appropriate Romanian governmental institution which contains the conformation that the hardware to be delivered in the framework of this project is free of import duties • A full guarantee by NV NUON on the delivery of Claims on ERUs and the fulfillment of financial obligations in case of non delivery

  14. Targoviste ProjectDescription • Installed capacity: 26.4 MWe / 32.8 MWth • Heat gaz engines ( total net efficiency 88%: e=39% şi th=49%) • Total Costs : 37 millions € • The annual total energy power output: 147,127 MWh • The total heat energy output: 224,145 Gcal (70% by cogeneration and 30% by Heat Only Boilers)

  15. Urgently Steps to Follow • Obtaining notice from The National Regulatory Agency (ANRE) regarding the heat and power energy tariff. • Finalizing the negotiations with S.C. Electrica S.A. • The foundation of The Project Company (PC) • PC signs the PPA with Electrica S.A., S.D. Târgovişte • PC negotiates and signs : • The contract for gas supply

  16. Next Steps • Carry out the detailed design of the project • The final negotiation of financing • The final decision to realise the project • To sign the Financing Agreement • To sign the contract for the project implementation • Start date of works: 2003 • End date of works: 2004 • Operating date : June 2004

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