Reconstruction of boiler room No. 7 of the KP "Smilakomunteploenergo" in the city of Smila, Cherkasy region, by installing (connecting) a cogeneration unit.


Sector
Municipal infrastructure and services
Stream
Reconstruction and modernization of community heating systems with the introduction of energy-efficient technologies and cogeneration units
Maturity level
83
Preliminary Investment Feasibility Study
Project Status
Investment Feasibility Study
Entry into Portfolio
Local level of SPP
Implementation
Completion

General information

Description of the project

The project plans to reconstruct the existing gas boiler house by installing (connecting) a cogeneration unit on its territory to generate electricity and heat. It is planned to connect the CHP to the gas, electricity and heat supply networks. The CHP's electrical capacity is 530 kW. Currently, the boiler house is completely dependent on external electrical networks. In conditions of a systemic power shortage in the Ukrainian power system and frequent emergency outages, the boiler house loses its ability to perform its main function - production and transportation of thermal energy. Sudden shutdowns of boiler equipment due to a lack of electricity lead to the cessation of coolant circulation, which in the winter period at sub-zero temperatures creates a risk of freezing and destruction of heating networks, heating systems in apartment buildings and social facilities. The use of backup power sources (generators) is a short-term solution that helps to temporarily maintain the system. At the same time, for long-term/continuous operation of the boiler room, the use of backup power sources (generators) is not relevant, as it requires constant fuel consumption and creates an excessive financial burden on the enterprise. 

The purpose of the project

Main Goal:

Improving the quality of services

Secondary Goal:

Improving the equality of wealth distribution, Introducing innovations and energy-efficient solutions

Description of the purpose of the project and ways to achieve it

The project plans to reconstruct the existing gas boiler house by installing (connecting) a cogeneration unit on its territory to generate electricity and heat. By installing a cogeneration unit on the territory of the existing boiler house, the utility company will be able to stably provide services to consumers in two microdistricts of the city and uninterrupted supply of heat energy to apartment buildings (2,465 consumers in the "population" category), budget consumers (3 preschool educational institutions, 1 higher education institution, 1 secondary education institution, 1 medical institution, a municipal enterprise building), 14 consumers in the "Other" category (entrepreneurial structures, a banking institution), which is critically important in the conditions of a power shortage in the energy system and given the recent weather conditions. Such a "modernization" of the technical base of the enterprise will ensure stable access to utility services, because constant heat generation avoids sharp temperature drops in the coolant and water hammer in the network during power outages. In addition, thanks to the electrical power of the cogeneration plant (530 kW), it is able to fully cover the boiler house's own needs (pumps, burners, automation) in electricity, which will reduce both the load on the city's power system and the company's costs for purchasing electricity. In addition, a powerful cogeneration plant will produce significantly more electricity than the boiler house needs, which will allow the company to give (sell) excess energy to the national grid in the future and receive income. Cogeneration plants usually operate in automatic mode and are integrated into the existing boiler house dispatching system, which will minimize the impact of the human factor and increase the overall safety of operation of this facility.

Problems and solutions resulting from project implementation

To maintain the boiler room's operability during frequent power outages and, accordingly, to ensure the supply of thermal energy to consumers, the boiler room is equipped with a diesel generator. Despite the fact that it allows you to avoid a complete shutdown of the system, this method has a number of critical drawbacks, in particular, maintaining the boiler room's operation from a diesel generator requires a significant amount of diesel fuel, which is financially costly for a utility company; a diesel generator is not designed for long-term continuous operation for weeks or months; generator maintenance requires the constant presence of personnel to refuel and monitor its operation; ensuring the operation of the boiler room from a diesel generator is directly dependent on the timely supply of large volumes of fuel; when switching the boiler room's operation from mains power to a generator, short-term stops of the pumping equipment often occur, which causes the risk of water hammer and disrupts the temperature schedule of the coolant. Under such conditions, the operation of the boiler room during a period of lack of electricity from a diesel generator is nothing more than a temporary measure. It does not provide energy sustainability (since it does not produce additional heat) and economically exhausts the enterprise. Installing a cogeneration unit will allow replacing expensive diesel fuel with natural gas, automating processes and turning the boiler room into an autonomous energy unit.

Socio-economic context

Indicator

Value

Number of people who will use the service

2465 human

Other functional

20 units

Strategic Case

Strategic feasibility of the project

Sector

Municipal infrastructure and services

Subsector

District Heating

Stream

Reconstruction and modernization of community heating systems with the introduction of energy-efficient technologies and cogeneration units

Strategic document

Стратегія розвитку територіальної громади

Task

B.1.4. Increasing the energy efficiency of heating systems

Project objectives

Indicator
Base value
Target value
electricity saving
4815446 UAH
3370616 UAH
natural gas savings
15579514 UAH
10905660 UAH

Project Sustainable Development Goals

Demand for the service and its dynamics

What methodology was used to estimate demand?

статистичні дані та розрахунки, щодо основних показників обслуговування кінцевих споживачів існуючим об'єктом та прогнозованим об'єктом після його реконструкції (підключення когенераційної установки)
[Response was provided in the Preliminary Investment Feasibility Study]

Has data from external sources been used in the demand assessment?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Does the demand forecast take into account the latest demographic and economic forecasts?

No
[Response was provided in the Preliminary Investment Feasibility Study]
Indicator
Year
Demand
Annual demand for services/infrastructure
1
2465 human
Annual demand for services/infrastructure
2
2465 human
Annual demand for services/infrastructure
3
2465 human
Economic justification

Analysis of the project's impact on ecology and climate change

Does the planned activity have a potential positive contribution to achieving climate or environmental objectives?

Climate change adaptation
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change mitigation
[Response was provided in the Preliminary Investment Feasibility Study]

Is the proposed project expected to significantly harm any of the following climate or environmental objectives?

None of the options are applicable

Project sustainability and inclusivity

Identify potential gender risks of the project and indicate possible ways to overcome them:

Not applicable to my project
[Response was provided in the Preliminary Investment Feasibility Study]

Does the project provide for improving women's access to services?

Not applicable to my project
[Response was provided in the Preliminary Investment Feasibility Study]

Are civil society organizations representing women and vulnerable groups included in the consultation process?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Documents

Name
Date
Cost-benefit analysis for the KSU project cat.№7.pdf
10.03.2026
20:04:55 UTC

Alternative technical solutions

Technical Solution 1

Reconstruction of boiler room No. 7 of the KP "Smilakomunteploenergo" in the city of Smila, Cherkasy region, by installing a cogeneration unit with a capacity of 530 kW

Technical Solution 2

Reconstruction of boiler room No. 7 of the KP "Smilakomunteploenergo" in the city of Smila, Cherkasy region, by installing a solar power plant

Cost breakdownCost justificationCost justification
Project cost (preparation and implementation)10'572'853 UAH29'219'409 UAH
For preparation739'427 UAH744'885 UAH
For implementation9'833'426 UAH28'474'524 UAH
Project operation and closure cost163'275'735 UAH125'178'322 UAH
For operation163'275'735 UAH125'178'322 UAH
Average annual costs38'006'432 UAH0 UAH
Project duration, incl.10 months10 months
Deadline for developing a FFS4 months4 months
Implementation period6 months6 months
Service life144 months120 months
Target indicatorsDefined Defined
Technical Solution Status
Active

[The technical approach was selected for further detailed analysis or implementation.]

Rejected

[The technical approach was not selected for further detailed analysis or implementation.]

Components of a technical solution
To components
0
To components
0

Commercial Justification

Supplier and contractor market assessment

Is the project likely to attract a sufficient number of bidders to ensure real competition that will encourage bidders to think innovatively and maximize the quality of their proposals?
Yes

[Response was provided in the Preliminary Investment Feasibility Study]

Is the project of interest to small and medium-sized enterprises?
Yes

[Response was provided in the Preliminary Investment Feasibility Study]

Will the project involve national or international suppliers and contractors?
Yes, only national

[Response was provided in the Preliminary Investment Feasibility Study]

Has an analysis of available procurement options been conducted for the technical solution?
Yes

[Response was provided in the Preliminary Investment Feasibility Study]

Financial justification

Total project budget

Total preliminary budget173'848'588 UAH154'397'731 UAH
Project cost (preparation and implementation)10'572'853 UAH29'219'409 UAH
For preparation739'427 UAH744'885 UAH
For implementation9'833'426 UAH28'474'524 UAH
Project operation and closure cost163'275'735 UAH125'178'322 UAH
For operation163'275'735 UAH125'178'322 UAH
For closing0 UAH0 UAH
Were the methodological recommendations approved by the Ministry of Finance of Ukraine applied when calculating the indicative budget?
Yes
[Response was provided in the Preliminary Investment Feasibility Study]
Were the methodological recommendations approved by the Ministry of Finance of Ukraine applied when calculating the indicative budget?
Yes
[Response was provided in the Investment Feasibility Study]

Average project cost per service recipient

Service Unitодиниця продукції - Гкал
Service Unit Cost2'243 UAH

Profitability of the project

Is the project expected to generate income?YesNo

Availability of services

Has an analysis been conducted of the accessibility of services for consumers and their financial ability to pay the established tariffs?
Yes – the analysis was conducted, it was found that the tariffs correspond to the financial capabilities of consumers

[Response was provided in the Preliminary Investment Feasibility Study]

Project Financing Mechanisms

Are funding sources and mechanisms identified?

Source and MechanismYesNo

Funding Sources

Approved Funds0 UAH0 UAH
Expected Funds0 UAH0 UAH

Public-private partnership

Has a qualitative and quantitative assessment of the project's suitability for implementation through a PPP mechanism been conducted?
The project does not fall under the PPP format by its nature/character

[Response was provided in the Preliminary Investment Feasibility Study]

Are there, after conducting an appropriate study, private investors interested in the possibility of implementing the project in the PPP format?
No

[Response was provided in the Preliminary Investment Feasibility Study]

Management Rationale

Team competencies

Determine which competencies/expertise required for successful project preparation and implementation can be provided by the project initiator's own project team (without involving external advisors)
Strategic justification - analysis of the strategic feasibility of the project

[Response was provided in the Preliminary Investment Feasibility Study]

Economic justification - economic analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Business case - analysis of available procurement options

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - legal support

[Response was provided in the Preliminary Investment Feasibility Study]

Strategic rationale - SDG compliance analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Financial analysis - financial analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Does the team have experience implementing similar projects?
No, this is the first project of its kind.

[Response was provided in the Preliminary Investment Feasibility Study]

Identify which competencies/expertise required for successful project preparation and implementation need to be strengthened by engaging independent experts or consultants
None of the options are applicable
Is there an understanding of where to find relevant experts and consultants?
Yes, negotiations are already underway.

[Response was provided in the Preliminary Investment Feasibility Study]

Risk assessment

Technical riskDefinedUndefined
Political riskDefinedUndefined
Results of the feasibility analysis
Project Preparation Program Engagement and Funding Needs

Does the project require additional preparation assistance from Project Preparation Facilities (PPF)?

None of the options are applicable

Project Approval History

DateDecision NumberPortfolioProject StatusDecisionReasonsMaturity level
11/03/2026SP-L-110326-3DC6C05BCommunity SPInvestment Feasibility StudyInclude--
13/03/2026SPP-L-130326-7CB9600DCommunity SPPInvestment Feasibility StudyIncludeapproved by the local investment council (minutes No. 2 dated 03/13/2026)83