Technical Assistance

Aim:

Gather basic data about the modernisation plan and the company to check eligibility and determine required tasks.

RUSEFF Tasks:

Initial tasks conducted by RUSEFF Team after receiving the completed Loan Request Form from the company:

• Check the Loan Request Form to understand the company's activities and learn about the modernisation plan;

• Check the company and the modernisation proposal to ensure they fulfilled the eligibility criteria to participate in the facility;

• Prepare and clarify open questions regarding the modernisation of the company.

After this the RUSEFF Team evaluated the collected information and prepared a basic statement including relevant facts. This statement is used to determine the viability of the modernisation and to get confirmation to the modernisation plan from the partner bank  and contains:

• Basic facts about the company and the modernisation;

• Comparison of energy performance of the company against standard energy efficiency benchmarks;

• Structure of energy consumption and the corresponding costs;

• Preliminary appraisal of the modernisation potential.

Results:

The company is a JSC and mid-sized company with 220 employees, which prepares and distributes oil. The company is considered eligible for the participation in the RUSEFF facility.

The proposed modernisation by the company was the replacement of a mazuth fired boiler with a modern gas fired boiler which in the first estimation showed a high saving potential.

Based on the company's data the RUSEFF experts determined the following energy structure and energy performance.

These figures indicated further modernisation potential which would result in lower energy costs.

Aim:

Collect data for the verification of the modernisation and their energy saving effects as well as identifying additional measures.

RUSEFF Tasks:

Based on the first review of the delivered data our experts identified additional modernisation potential which required further investigation. In addition, data was needed to validate the saving effect of the boiler exchange. The RUSEFF Team scheduled a site visit assess the production plant and discuss possible measures with related engineers and managers. The following was conducted in connection to the site inspection:

• Assessment of the energy infrastructure and history of energy consumption;

• Site inspection of the production equipment and facility;

• Gather measurements and data to check and verify energy consumption of the specific equipment;

• Analysis of gathered data and assessment of particular equipment efficiency;

• Determine the modernisation measures for improved energy utilisation and their energy savings effects.

Results:

The main outcome of this step was the Energy Assessment Report including the identified modernisation measures which covered:

• Description of and reason for the modernisation;

• Determination of the energy saving and cost saving;

• Estimation of the investment amount for the measure.

In addition, to the measure proposed by the company the RUSEFF experts identified two more measures as follows:

• The refurbishment of the boiler house including the replacement of five old DKVR boilers with two modern gas fired water boilers. The fuel switch and increased efficiency of the new equipment would result in annual energy savings of 2 915 MWh (fuel equivalent);

• The higher productivity of a new filling station used for the distribution of oil will result in annual energy savings of 44 MWh. In addition, the new equipment significantly reduces oil losses by eliminating leakages and reducing maintenance;

• The replacement of pumps for water treatment in the plant would reduce the electricity consumption by 417 MWh per year. The new equipment would provide more efficient pumping with less power and make the additional cooling of pumps obsolete.

Aim:

Provide a full report on the modernisation which is used for bank and management decisions. In addition, provide explanations for the identified measures and economic calculations.

RUSEFF Tasks:

After discussing and approving the identified measures with the company the information in the Energy Assessment Report was used to develop the Final Report. Additional data from the company further improved the calculation. To develop the report the following tasks were conducted by RUSEFF:

• Compile all information for the modernisation measures and the company;

• Verify the energy and other savings;

• Collect and broke down the investment costs;

• Calculate the cash flow and viability parameters for the entire investment;

• Prepare a sensitivity analysis to show viability figures for different scenarios;

• Conducted a risk analysis.

Results:

The main outcome is the Final Report which consists among other things of:

• The technical and economic results for the modernisation measures and the total investment

• The calculated СО₂ reductions which amount to 1760 tons per year from the entire modernisation;

• The cash flow showing full coverage of the debt service by the cost reductions;

• The viability parameter of the total project with an IRR of 75.1%, a payback period of 13 months and an NPV of 2.1 million USD;

• The consideration of future energy tariff trends, e.g. 10 years average for electricity is 0.082 USD/kWh;

• The risk assessment of the modernisation plan estimated to be comparatively low.