2006

Client: European Bank for Reconstruction and Development (EBRD), the City of Kharkiv, Ukraine (Greenfield as a sub-consultant to Pöyry Energy)

Kharkiv is the second largest city in Ukraine with a population of 1.5 million. Kharkiv was one of the most industrial cities in the former Soviet Union, known for manufacturing of steam turbines, tractors, military equipment and other large scale industrial products. The city is also known for its various educational institutions, cultural and political organizations.

The metropolitan area of the city is densely built. Taken the availability of excess heat from industrial plants with electricity and steam generation for their own needs, the district heating system has historically proven to be a successful method for heating the buildings in the city.  In zones where long transmission pipelines would be required or where it was difficult to install pipes, small local boiler houses have been constructed. Hence, the heating of the city of Kharkiv is a mixture of a large central system and a significant number of small boiler houses.

The city had requested the EBRD for financing efficiency improvements on Municipal District Heating and Municipal Wastewater Treatment sectors.

The overall objective of the assignment was to prepare a priority investment program and a feasibility analysis which would allow the EBRD to appraise whether the proposed CHP DH renovation program is suitable and bankable for the EBRD to finance.

The work on the Municipal DH sector included on technical side establishing the least cost investment program (Pöyry Energy). The financial side included Grant Thornton (auditors) converting the Kharkiv DH Co historical Financial Statements from the national accounting standards (NAS) to International Financial Reporting Standards (IFRS). Greenfield built the future financial model starting from the company’s current financial position and including the future estimated cash flows and investments taking into account the proposed renovation program. Greenfield’s work also included analyzing the affordability of anticipated future heat sales tariffs. The main result was the assessment of the company’s capability to cover the EBRD loan interest and payback.