CMS Bulgaria: Government launches tender for waste incinerator in Sofia

Authors: Dimitar Zwiatkow, Partner, and Maria Harizanova, Associate at CMS Bulgaria

Bulgaria launched a tender for approximately EUR 149.4 million without VAT for the construction of a combined heat and power plant (CHP) in Sofia. The deadline for submitting offers is 15 April 2021.

The waste incinerator project plans to construct a facility for incinerating an alternative fuel derived from processed waste – RDF (Refuse-Derived Fuel). The RDF will be used by the Sofia Thermal Power Plant (TPP Sofia) as an alternative to natural gas. The waste incineration plant must be built on the TPP Sofia site and will burn fuel produced from Sofia residents’ waste.

The capacity of the future installation will be 180,000 tons of modified waste per year. The fuel will be provided by the Sofia Municipality free of charge, which in turn should reduce the costs of Toplofikacia Sofia (the Sofia district heating company). The incinerator plant is expected to save around 65 million cubic meters of natural gas per year, or EUR 15 to 18 million.

Stages of the project

The installation for burning RDF is the so-called third phase of the waste management system project in Sofia. The first two phases have already been completed: a landfill, a composting site, and a mechanical and biological treatment plant. In March 2013, a design contract was signed with the Danish consulting company Ramboll A/S and subcontractor Ecopro Consult EOOD. The decision to locate the site at TPP Sofia was made in 2015 after an analysis by Rambol. The specific technology to be used to burn the fuel was also chosen based on their recommendation.

However, due to a subsequent change in the legislation, the conceptual design, which had already been prepared, had to be revised. Afterwards, in 2015 the Sofia Directorate for Fire Safety and Protection refused permission for the project. In 2015, the Sofia Regional Environmental Inspectorate issued an Environmental Impact Assessment (EIA) on the investment proposal that imposed additional requirements for the design phase.

In 2016, the Sofia Municipality announced a public tender for updating the conceptual design. In 2017, the Sofia Municipality announced its intention to look for financing to implement the project. The total cost of the project exceeds EUR 150 million. The European Commission approved EUR 94 million for the facility. In addition, the Sofia Municipality took a loan from the European Investment Bank to finance the remaining cost of the project.

Tender

After some administrative and court hurdles over the past few years, the project is finally on again. Toplofikacia Sofia announced in January 2021 that they will launch a tender for a BGN 292.2 million (approx. EUR 149.4 million) without VAT for constructing the combined heat and power plant (CHP) in Sofia. The deadline for submitting offers is 15 April 2021. The bidders should have at least eight years of experience in the field falling within the scope of the procurement, namely designing, building, and commissioning energy capacities or facilities for RDF waste or municipal waste.

The candidates must have a minimum turnover in the field (construction of energy facilities, RDF plants or waste) of BGN 290 million (approx. EUR 148 million) for the last three years. To meet the selection criteria, the candidate may cooperate with other entities. There is no requirement for establishment of a legal entity if the selected candidate is a consortium of physical persons and/or legal entities.

The scope of the contract includes design, supervision, and construction of an installation for combined energy production in Sofia with utilization of RDF-fuel, as well as preparation, purchase / delivery / installation (commissioning) of the necessary equipment and facilities, and elimination of defects in the operation of the installation within the period for reporting defects, which is 2 years. The scope also includes assisting the contracting authority in the operation and maintenance of the installation and training of staff for a period of 3 years.
The start date of the project is 29 July 2021, and the end date is 31 December 2023.

It is estimated that the new facility will have the capacity to produce approximately 55 MW of heat and 18 MW of electricity. This means heat for 40,000 people and electricity for 30,000 people.