CZECH REPUBLIC

1
CZECH REPUBLIC

• Joined the EU on May 1, 2004

• Signatory to the Kyoto Protocol

• Target renewable energy share
• in 2010 8

• Additional RES capacity to be built
• to meet the target 3.7 TWh/yr

• Biomass accounts for 80 of the
• country RES potential

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RES promotionin the Czech Republic

• The Czech Government supports new RES erection
  through
• Subsidized renewable electricity prices
• Five-year tax holiday
• Direct subsidies
• Emission reduction units revenue

• New RES Promotion Law in the context of full
  liberalization
• of the electricity market in 2006, expected
  to get passed
• this year, introducing the green
  certificates concept

• EU Structural Funds and other internal programs

• Indirect support (human resources, SMEs,
  farming, )

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The Project

• Pilot project

• Steam condensing Rankin-Clausius power plant

• 10 MWe net electricity supply

• Main fuels energy plants and grain straw

• Supplementary fuels wood chips,
• 
  food crop waste,

• Location Industrial site in the outskirts of
• Hradec Kralove, Czech
  Republic

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Key Parameters

• Boiler rated heat output 42 MWt

• Turboset rated capacity 12 MWe

• Projected capacity utilization 80

• Gross electricity production 84 100
  MWh/yr
• Net electricity supply
  70 000 MWh/yr

• Fuel consumption 83
  500 t/yr

• Fuel average heat value 14
  GJ/t

• Emmision reductions 80
  000 tCO2/yr

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Financial Parameters ( mn)
(may change substantially after the technology
supply tender completion)

• Investment budget 15.8

• Initial working capital 1.1

• Annual revenues
  5.8
• (assuming the electricity price CZK 2.50
  per kWh, with electricity
• sales at the bottom of the expected range
  and with zero CO2
• emission reduction revenues)

• Annual operating costs 3.7
  

• Operating Profit
  2.1

6
Current State of the Project

• Suitable piece of land secured

• Positive master planning decision obtained

• Technology supply tender announced

• Building permit application being prepared,
• the permit to be obtained by the end of 2004

• Czech Government grant applied for

• EU structural funds grant application being
  prepared

• Negotiations with equity investors on-going

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Fuel Supply Energy Plants

• Major fuel source in the long run

• Hectare yield 10 to 15 t/ha

• Cropped area to fully cover the facility fuel
  demand
• 8 000 ha

• Ideal use of the land redundant for the food
• production

• The market in the Czech Republic to be
  established
• yet

8
Fuel Supply Grain Straw

• Major fuel source in the first few years

• Current oversupply in the Czech Republic
  expected
• to grow in the view of the latest state
  agricultural
• policy developments

• New bio-ethanol promotion legislation gt straw
  as
• a waste

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Fuel SupplyCurrent Contractual Position

• Preliminary agreements with ca 150 farmers and
• a wholesale contractor cover the initial
  fuel
• demand for a full capacity operation

• Long term deliver-or-pay agreements pre-agreed,
• to be executed after the facility
  construction
• commencement

• Fuel auction
• to establish the biomass fuel market
• to maintain optimal market prices in the long
  run

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The Site

• 2.3 ha industrial site plot on the outskirts of
• Hradec Kralove, Czech Republic

• In the ownership of EGST

• Master planing decision issued

• May accomodate up to 3 units of the projected
• size in the future

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The Site - Infrastructure

• Nearby 110/6 kV switching station, 200 m from
• the plot border !

• Two railway sidings

• Favourable road-access location

• Sufficient gas, electricity, water and sewage
• capacity in place

• No conflicts with the adjacent land owners and
• satisfactory result of the
  hydro-geological,
• emission dissemination, noice etc. studies.

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Project Developer

• EGST, s.r.o.

• Main activities turn key deliveries, design,
• assembly, revision work and consultancy in
  the
• field of protection, control and signalling
• technologies for energy facilities of all
  voltage
• levels, automation of the related processes

• No. employees 40

• Annual turnover EUR 1,2mil.

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Other Stakeholders

• Ministry of Environment of the Czech Republic

• Czech Environment Fund

• Ministry of Industry and Trade
• of the Czech Republic

• CzechInvest

• EBRD

• IFC

• Commercial banks

• Equity investors

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Financial Model
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Financial Model - case 1
This case is pessimistic variant of the Financial
Model
IRR gt 15
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Financial Model - case 2
This case is optimist variant of the Financial
Model
IRR gt 30
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Contacts
EGST, s.r.o. Vsehrdova 293/28 500 02 Hradec
Kralove Czech Republic http//www.egst.cz Tel
420 49 5532 998 Mr. Zdenek Tetrev, Mananging
Director tetrev_at_egst.cz Mr. Ales Mitterko,
Project Manager mitterko_at_egst.cz Leonard
Beitler, Financial Advisor Na Orechovce 47 162 00
Praha 6 Tel. [phone] , Fax 420 233
343 562 leonard_at_nextra.cz