Serbian Energy and Mining Minister, Aleksandar Antic has signed a loan and donation agreement with the representatives of the German KfW Bank and the Swiss government that will enable 10 heating plants in Serbia to transition from using fossil fuels to renewable energy resources, namely biomass.
The project is worth a total of EUR 27 million, which apart from the loan, includes a EUR 2 million grant from the KfW while the government of Switzerland will secure EUR 5 million.
The agreements on financing conversion of district heating companies from fossil fuel to biomass-based are part of the project Stimulating Renewable Energy – the Development of the Biomass Market in Serbia (DKTI) which was launched in Serbia back in 2012 with a feasibility study for Subotica district heating company. The signing of the agreement marked the start of first stage of that project, with total value of EUR 108 million, where EUR 8 million goes to the technical assistance of GIZ.
Speaking after the signing ceremony, Minister Antic said that the loan was approved under very favourable conditions which include a low interest rate of 1.1%, a five year grace period and a 10 year deadline for the municipalities which get the loans to repay the money.
He said the project goal was to convert as many heating plants as possible from fossil fuels to biomass or other renewable energy sources. “The first stage will include heating plants in the municipalities of Mali Zvornik, Nova Varos, Novi Pazar, Prijepolje, Bajina Basta, Valjevo, Priboj, Kladovo and Majdanpek”, Antic said and added that the municipality of Bečej has already launched two projects – one to convert a part of its heating plant to biomass and the other aimed at using geothermal energy.
German ambassador to Serbia, Axel Dittman said the project was important in the context of Chapter 27 of the pre-acession negotiations with the European Union, adding that the conversion to renewable energy sources also lowers carbon dioxide emission and helps protect the environment.
(Vecernje Novosti, Balkan Green Energy News, 21.06.2017)
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