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Detail of GEF Project #9

GEF Project ID9
Funding SourceGEF Trust Fund
Project NameSzombathely CHP/Biomass Project
RegionEurope and Central Asia
Focal AreaClimate Change
Operational ProgramSTRM
Approval Date1999-12-01
Project Cancellation Date2002-02-14
Project StatusCancelled
GEF AgencyWorld Bank
Executing AgencyMinistry of Economy
DescriptionThe main purpose of this project is to decrease harmful emissions of greenhouse gasses in ways that deliver economically competitive heat supplies to a major portion of Szombathely and competitively priced electricity to the grid. Additional project objectives are to strengthen rural employment and incomes through increased beneficial usage of wood; and to demonstrate the technical feasibility of wood-firing for district heating coupled with electric production using gas motors. The global environmental objective is to reduce CO2 emissions in order to help Hungary meet its international obligations under UNFCCC. It is expected that, over a 20-year period, the project will reduce CO2 emissions by 0.925 million tons. The major physical components of the project include a new, gas-motor CHP with 20.0 MWe and 24.0 MWth capacities, a 7.5 MWth wood-fired boiler, new segments of district heat pipeline to connect existing island systems, controls for the gas-fired peaking boilers, gas and electric interconnections, biomass handling equipment, and additional civil works.
Implementation StatusThe reasons for dropping the project were electricity market volatility and institutional weakness. Under the current energy law, electricity from renewables is priced favorably. However, there is a high level of uncertainty about the future, and the concerned parties (the local electric distribution company and the municipal district heating company) were not able to agree on pricing principles and other terms for entering into a long-term power purchase agreement. Furthermore, the municipality of Szombathely, which was to participate as local investor, had not committed to financially sustaining the project, failing therefore to demonstrate project ownership.
GEF Project Grant
2,500,000 USD
GEF Grant
2,500,000 USD
Cofinancing Total
25,500,000 USD
Project Cost
28,000,000 USD
GEF Agency Fees
382,000 USD
Project Documents

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