Understanding between Romania and Netherlands Regarding the Achievement of Joint Implementation Activities

1
Understanding between Romania and Netherlands
Regarding the Achievement of Joint Implementation
Activities

• Targoviste Cogeneration and District Heating
  Municipal Project
• April, 2002

2
The City Of Targoviste Background
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
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
NL- Government
Memorandum of Understanding
IFC
Agreement of Cooperation
NCC
CL, TERMICA, NUON
S.C. Comenor Târgoviste S.R.L.

Engineering, Procurement Contracting (EPC)
Intretinere si Exploatare (OM) 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 Târgoviste)
• In cooperation with IFC (World Bank)
• Financing analysis ING Barings
• Total costs around 40 millions (Cluj-Napoca)
• around 40 millions (Târgoviste)

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 2001The 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
  ?e39 si ?th49)
• 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.
  Târgoviste
• 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