Implementing agency: Winrock International

Status: delayed

Description:
Communities in Russia Far East are anxious to convert their district power and heating plants to burn biomass derived from surrounding forests, including timber industry residues and wastes. Existing plants operate on 50-year-old coal-burning technology that is high in moisture and ash content. Biomass-fuelled community heat and power systems will improve energy security for large numbers of people while dramatically reducing emissions of sulphur and nitrogen oxides, carbon monoxide, fly ash, soot and other harmful chemicals, as well as CO2.

However, the municipal authorities that run the existing plants cannot access the finance necessary to make investments in cleaner, more efficient equipment. REEEP is working with Winrock International to establish a funding mechanism that uses carbon credits based on future emissions savings as security for loans to finance the investment. Winrock are now in discussions with Russian partner banks, Vneshtorgbank and Sberbank, to provide loans for ten biomass-fuelled district heating projects, supplying some 20 communities in the areas of Irkutsk Oblast and Khabarovsk Khai. Revenues flows from future carbon credits, securitised by international financial institutions, are expected to provide more than sufficient funds to cover the loans.