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District heating operators’ debt rises threefold

Published

June 10, 2015

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Published:

June 10, 2015

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Repairs started on June 1 in district heating plants in Serbia and most of the companies operating the facilities are heavily indebted, daily Večernje novosti reported. In just two months, total liabilities soared from RSD 8 billion (EUR 66.3 million) to EUR 190.6 million, mostly because of loan instalments due for payment after a year of grace period, the report said.

District heating operators borrowed extensively at development banks last year and cut what they owed to gas monopoly JP Srbijagas up to 40%. Still, most have problems in repaying the loans, so it is difficult to finance repairs. Milovan Lečić of Toplane Srbije, the heating plants association, told the newspaper that total debt was still smaller than a year ago, but rising. Still, one must take into account that citizens owe EUR 273.4 million, which means this debt multiplied, he added. „It seems no one is paying,“ Lečić said.

Still, he is certain there will be no problems in preparing the machines for the next heating season, but adds that only the necessary parts would be replaced in the facilities.

The Law on Efficient use of Energy introduced energy services as a business activity provided by specialized companies through ESCO (energy service company) model of contracting.

Most Balkan countries which utilize biomass inefficiently, or have developed processing of biomass, compensate energy which can be produced from biomass, now inefficiently used or used for exported products, by importing electricity, natural gas and fossil fuels. In addition, increased demand for firewood, wood pellets and other fuels reduces available quantities of biomass which could be used in local heating plants or power plants.

Meanwhile, very few of 78 geothermal wells are utilized in Vojvodina, Serbia’s northern province, while their overall potential is more than 70 MW. Still, there are local projects aiming for the start of mainstream use.

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