Loan will co-finance upgrade of the heat generation and distribution system in the city of Brno, reducing emissions and the dependence on gas imports
Project includes construction of a new biomass-fired CHP unit, which will improve security, efficiency, and flexibility of heat supply
The European Investment Bank (EIB) has signed an agreement with Teplarny Brno for a €75 million loan to co-finance the upgrade of the heat generation and distribution system in the City of Brno, in the Czech Republic. The project includes construction of a combined heat and power biomass unit (CHP) fuelled by wood chips, which will contribute to the reduction of greenhouse-gas emissions and pollution.
Teplarny Brno is a utility company that generates and supplies heating to the city of Brno as well as electricity to the national grid. In addition to the construction of a biomass unit, the company will use EIB’s financing for the modernisation of 5 km of pipelines and the construction of 5.5 km of new ones, as well as the modernisation of 16 transfer stations and construction of 105 new ones. The upgraded infrastructure will lower network losses and allow the connection of new customers to the grid.
“Today’s agreement highlights the EIB’s unwavering commitment to support a just transition to a low-carbon economy,” EIB Vice-President Lilyana Pavlova said. “The switch away from gas to renewable sources, like biomass, is a critical priority not just for the future of our planet and public health, but also to safeguard the security and affordability of our energy supply. It is also a great example how the EU Bank is supporting cohesion policy.”
The 15-year loan signed today will support the phase out of the use of gas for heating in the Czech Republic’s second biggest city. It will also help the country meet the targets of its National Energy and Climate Plan. Upgrading energy distribution networks to limit losses and incorporate more generation from renewables is a key priority for the EIB.
“The city of Brno, as the owner of Teplarny Brno, welcomes today's signing of the loan agreement with the EIB, which will primarily enable the financing of the modernization of the heat production and distribution system in our city,” said the Mayor of Brno, Markéta Vaňková. “This is another important step towards Brno's gradual weaning from dependence on gas.”
The financing will benefit a less developed EU region in terms of per-capita-GDP, supporting the EIB’s policy priority to promote equitable growth and territorial cohesion in our Union. The project is also part of the EIB’s contribution to the REPowerEU plan of eliminating Europe’s dependence on fossil-fuels.
“We are thrilled to have such an important partner as the EIB for the financing of our first truly green project, which is the construction of a biomass source for the production of heat and electricity from wood chips,” said Petr Fajmon, CEO of Teplarny Brno.
About the European Investment Bank
The EIB finance sound investments that contribute to EU policy goals, including social and territorial cohesion, and the just transition to climate neutrality. We support projects in infrastructure, innovation, climate and environment, and small and medium-sized enterprises. In 2022, the EIB signed €1.85 billion in new financing for projects in the Czech Republic.