Reconstruction of the central city boiler house of the municipal enterprise "UZhKG" with the installation of a heat pump with a thermal capacity of 4 MW.


Sector
Municipal infrastructure and services
Stream
Restoration, modernization and development of the district heating system
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 for the reconstruction of the central boiler house of the municipal enterprise "UZhKG" provides for the installation of a heat pump (air-water) with a thermal capacity of 4 MW on the territory of the boiler house. 

In the first quarter of 2026, it is planned to put into operation a solar station  with a capacity of 1500 kW and an energy storage system with an energy reserve of 1290 kW•h on the territory of the central city boiler house.

The hot water supply system  was introduced in 1987 and is still in operation. For the operation of the city's hot water supply system in the summer, the central city boiler house and heat networks must ensure the supply of coolant with a temperature of 70°C to each city's central heating station. The actual average heat load of hot water supply, taking into account the fact that the equipment is operating in the summer, will be 4 MW. Since 2014, hot water supply service has not been provided in the inter-heating (summer) period, which leads to a decrease in the operational reliability of technological equipment and heating networks.

The implementation of this project will primarily resolve the issue of providing hot water supply service in the city in the summer and increasing the operational reliability of the heating system and centralized hot water supply equipment in the city. Also, after implementation, the following problems will be solved:

·  Economic efficiency: In the summer, the heat pump provides thermal energy production with a much higher conversion coefficient (from 3 to 5 times), which is much cheaper than using gas boilers.

·  Refusal of the «summer» boiler mode: High-power gas boilers have low efficiency when operating at low load (only for DHW). The heat pump works efficiently, eliminating fuel waste.

·  Environmental friendliness: Greenhouse gas and nitrogen oxide emissions are significantly reduced, which is important for urban infrastructure.

·  Energy independence: Natural gas consumption is reduced, which increases the reliability of hot water supply in conditions of unstable supplies.

·  Automation: Modern heat pumps operate autonomously, do not require constant maintenance, and hybrid systems can automatically switch between energy sources.

As a result of installing a heat pump with a thermal capacity of 4 MW, the following will be achieved:

  • reduced natural gas consumption for thermal energy production (due to the use of renewable energy sources), which is at least 14.0% of the annual consumption of the boiler house.
  • 100% provision of centralized hot water supply services to all city consumers 8,560 subscribers (including the population - 8,543 subscribers, budget institutions - 5 subscribers and other consumers - 12 subscribers) in the summer period.
  • Saving money by reducing costs for emergency repair work on all heat supply and hot water supply systems by increasing the operational reliability of technological equipment and heat networks.

The purpose of the project

Main goal:

Introducing innovations and energy-efficient solutions

Secondary goal:

Improving the quality of services

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

The project for the reconstruction of the central boiler house of the municipal enterprise "UZhKG" provides for the installation of a heat pump (air-water) with a thermal capacity of 4 MW on the territory of the boiler house. In the first quarter of 2026, it is planned to put into operation a solar station with a capacity of 1500 kW and an energy storage system with an energy reserve of 1290 kWh on the territory of the central city boiler house. This project will allow the use of modern technological equipment (heat pumps), and electricity generated from renewable energy sources will be used (from the implemented solar power plant on the territory of the boiler house), which will be able to solve the issue of providing hot water supply services in the city in the summer and increasing the operational reliability of the equipment of the heat supply system and centralized hot water supply in the city. Also, after implementation, the following problems will be solved: • Economic efficiency: In the summer, the heat pump provides thermal energy production with a much higher conversion coefficient (from 3 to 5 times), which is much cheaper than using gas boilers. • Refusal of the “summer” mode of boilers: High-power gas boilers have low efficiency when operating at low load (only for DHW). The heat pump works efficiently, eliminating excess fuel consumption. • Environmental friendliness: Emissions of greenhouse gases and nitrogen oxides are significantly reduced, which is important for urban infrastructure. • Energy independence: Natural gas consumption is reduced, which increases the reliability of hot water supply in conditions of unstable supplies. • Automation: Modern heat pumps operate autonomously, do not require constant maintenance, and hybrid systems can automatically switch between energy sources.

Problems and solutions resulting from project implementation

Lack of centralized hot water supply in the inter-heating (summer) period, which leads to a decrease in the operational reliability of technological equipment and heat networks. After the implementation of the project, the issue of centralized hot water supply in the inter-heating (summer) period when using renewable energy sources will be resolved and will: • reduced natural gas consumption for thermal energy production (due to the use of renewable energy sources), which is at least 14.0% of the annual consumption of the boiler house. • 100% provision of centralized hot water supply services to all city consumers 8560 subscribers (including the population - 8543 subscribers, budget institutions - 5 subscribers and other consumers - 12 subscribers) in the summer period. • Saving money by reducing costs for emergency repair work of all heat supply and hot water supply systems by increasing the operational reliability of technological equipment and heat networks.

Socio-economic context

Indicator

Value

Number of people who will use the service

21.6 thous. people

Strategic Case

Strategic feasibility of the project

Sector

Municipal infrastructure and services

Subsector

District Heating

Stream

Restoration, modernization and development of the district heating system

Strategic document

Стратегія розвитку територіальної громади

Task

2,3,4,6 Modernization of the central city boiler house. Modernization of central heating stations. Reconstruction of main pipelines and distribution systems. Implementation of projects for the generation of electricity from renewable sources at heat, water supply and wastewater facilities.

Project objectives

Indicator
Base value
Target value
Number of people who will be provided with centralized hot water supply during the inter-heating (summer) period
0 thous. people
21.6 thous. people

Project Sustainable Development Goals

Demand for the service and its dynamics

What methodology was used to estimate demand?

При оцінці попиту споживання гарячої води (ГВП) застосовується методологія, що ґрунтується на «Методиці розподілу між споживачами обсягів спожитих у будівлі комунальних послуг» (затв. наказом Мінрегіону №315). Основні елементи методології для міста є: 1. Розподільний облік (якщо квартира має лічильник, обсяг визначається за його показниками), 2. Нормативний метод (якщо лічильника немає, споживання розраховується на основі норм). В КП "УЖКГ" наявні бази споживачів, приладів обліку ГВП, щомісячно збирається інформація щодо фактичного споживання, додатково проводиться розрахунок споживання за нормою (де невстановлені прилади обліку).
[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?

Yes
[Response was provided in the Preliminary Investment Feasibility Study]
Indicator
Year
Demand
Annual demand for services/infrastructure
1
69400 m3
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]

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

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

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

Climate change adaptation
[Response was provided in the 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

Have the greenhouse gas emissions or emission reductions (Scope 1-2) associated with the project been calculated for a typical year and the entire project period?

No
[Response was provided in the Investment Feasibility Study]

Does the project require an environmental impact assessment (EIA) in accordance with the Law of Ukraine "On Environmental Impact Assessment"?

Conducting an EIA is not required.
[Response was provided in the Investment Feasibility Study]

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?

Other benefits from project implementation
[Response was provided in the Preliminary Investment Feasibility Study]
Envisaged training or advanced training for women in the private sector
[Response was provided in the Preliminary Investment Feasibility Study]
The project will improve women's access to education (primary, secondary, vocational)
[Response was provided in the Preliminary Investment Feasibility Study]
The project will create jobs available to women (temporarily or permanently)
[Response was provided in the Preliminary Investment Feasibility Study]
The project will improve women's access to safe water, food, and medical services
[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]

Were consultations held with representatives of target groups to take into account gender equality issues in the project?

No consultations were held with target groups.
[Response was provided in the Investment Feasibility Study]
Women's participation is ensured at various stages of planning (including public hearings)
[Response was provided in the Investment Feasibility Study]

Have the gender risks and social impacts of the project been assessed?

All possible positive impacts of the project on women, men or other gender groups have been identified
[Response was provided in the Investment Feasibility Study]
The percentage of women who could be resettled has been quantified
[Response was provided in the Investment Feasibility Study]
The percentage of women who may lose or gain access to resources (water, food, healthcare) is quantified.
[Response was provided in the Investment Feasibility Study]

Are there management and institutional mechanisms in place to ensure gender equality?

A policy/code of conduct on non-discrimination and gender equality has been developed
[Response was provided in the Investment Feasibility Study]
A gender specialist/advisor is included in the project management structure
[Response was provided in the Investment Feasibility Study]
Mandatory training for project staff on gender equality and inclusion is provided
[Response was provided in the Investment Feasibility Study]

Documents

Name
Date
Efficiency indicators of a heat pump installation with a capacity of 4 MW.xls
26.02.2026
08:53:31 UTC

Alternative technical solutions

Technical Solution 1

Reconstruction of the central city boiler house of the municipal enterprise "UZhKG" with the installation of a heat pump with a thermal capacity of 4 MW.

Technical Solution 2

Reconstruction of the central city boiler house with the replacement of the KVGM-50-150 water heating gas boiler with two new water heating gas boilers with a total capacity of 32 MW located in the city of Slavutych

Total costs120'300'000 UAH85'700'000 UAH
  • For preparation
  • 3'350'000 UAH5'365'000 UAH
  • For implementation
  • 116'650'000 UAH79'635'000 UAH
  • For operation
  • 120'000 UAH700'000 UAH
  • For closing
  • 180'000 UAH0 UAH
    Average annual costs120'000 UAH700'000 UAH
    Project duration, incl.24 months24 months
  • Deadline for developing a FFS
  • 12 months12 months
  • Implementation period
  • 12 months12 months
    Service life240 months180 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, both national and international

    [Response was provided in the Preliminary Investment Feasibility Study]

    Has an analysis of available procurement options been conducted for the technical solution?
    No

    [Response was provided in the Preliminary Investment Feasibility Study]

    What procurement strategy was chosen for the project implementation, and what justifies its feasibility in the context of the market and project objectives?
    Для реалізації проєкта обрано стратегію, що базується на централізації, конкурентності та цифровізації, використовуючи відкриті торги в системі ProZorro. Ця стратегія гарантує прозорість витрат, знижує корупційні ризики та забезпечує найкраще співвідношення ціни та якості завдяки участі широкого кола постачальників.

    [Response was provided in the Investment Feasibility Study]

    What approaches are planned to be used to ensure transparency, competition, and efficiency in the procurement process?
    Для забезпечення прозорості, конкуренції та ефективності закупівель застосовуються обов'язкове планування (річний план), використання системи ProZorro (відкриті торги), проактивна оцінка ризиків та професіоналізація уповноважених осіб. Ключовими підходами є оприлюднення інформації, рівне ставлення до учасників та ефективне управління бюджетом.

    [Response was provided in the Investment Feasibility Study]

    What types of procurement procedures are envisaged by the project (open tender, negotiated procedure, competitive dialogue, etc.)?
    Open competitive bidding

    [Response was provided in the Investment Feasibility Study]

    Competitive dialogue

    [Response was provided in the Investment Feasibility Study]

    Pre-market engagement
    Для збору та формування вимог до проєкту було попередньо проведений аналіз аналогічних проектів, надіслані запити до виробників.

    [Response was provided in the Investment Feasibility Study]

    Potential market participants
    Наданому етапі тобто до розробки проєтку не можливо сказати хто може бути потенційним постачальником, підрядними організація та як взагалі не визначено необхідне конкретне технологічне обладнання.

    [Response was provided in the Investment Feasibility Study]

    Market readiness assessment
    Український ринок на початку 2026 року демонструє високу готовність до впровадження теплових насосів, стимульовану курсом на енергонезалежність та декарбонізацію. 1. Наявність виконавців та технологій Фахівці: Сформовано стале коло професійних інженерних компаній (наприклад, Елементум, ТРІАТЕК). Кваліфікація проектувальників є критичною, оскільки помилки в розрахунках можуть збільшити термін окупності до 15 років. Доступність: На ринку представлені провідні світові бренди (Daikin, Mitsubishi, Viessmann) та доступніші рішення, що дозволяє підібрати необхідне обладнання. 2. Потенційні бар’єри Економічні: Висока початкова вартість залишається головною перешкодою. Хоча операційні витрати значно нижчі за традиційні методи, окупність залежить від тарифів на електроенергію та наявності субсидій. Технічні: Ефективність систем повітря-вода знижується при екстремально низьких температурах

    [Response was provided in the Investment Feasibility Study]

    Financial justification

    Total project budget

    Total preliminary budget120'300'000 UAH85'700'000 UAH
    Capital costs120'300'000 UAH85'700'000 UAH
    Operational costs0 UAH0 UAH

    Preliminary cost breakdown

    Operating costs for implementation0 UAH0 UAH
    For preparation3'350'000 UAH5'365'000 UAH
    For implementation116'650'000 UAH79'635'000 UAH
    For operation120'000 UAH700'000 UAH
    For closing180'000 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?
    No
    [Response was provided in the Investment Feasibility Study]

    Average project cost per service recipient

    Service UnitСередня вартість проєкту на одного отримувача послуги
    Service Unit Cost5'556 UAH

    Profitability of the project

    Is the project expected to generate income?NoNo
    Is the project self-sustaining?Yes
    Has the financial condition of the potential beneficiary been assessed in accordance with the order of the Ministry of Finance of Ukraine dated 14.07.2016 No. 616?
    Yes
    NPV Value1 UAH

    Availability of services

    Has an analysis been conducted of the accessibility of services for consumers and their financial ability to pay the established tariffs?
    No – analysis not performed

    [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 Funds3'350'000 UAH0 UAH

    Public-private partnership

    Has a qualitative and quantitative assessment of the project's suitability for implementation through a PPP mechanism been conducted?
    No, no assessment was conducted.

    [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]

    Project management - communication with stakeholders

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - public consultations

    [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]

    Strategic rationale - demand analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Does the team have experience implementing similar projects?
    Partially, we have limited experience

    [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
    Economic feasibility study - technical expertise

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - social and gender analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic justification - forming a justification for the problem and need

    [Response was provided in the Preliminary Investment Feasibility Study]

    Business case - analysis of the market environment

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic rationale - SDG compliance 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]

    Economic justification - economic analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Financial analysis - financial analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - risk management

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - working with international financial organizations (IFOs)

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management justification - legal support

    [Response was provided in the Preliminary Investment Feasibility Study]

    Is there an understanding of where to find relevant experts and consultants?
    No, I need help.

    [Response was provided in the Preliminary Investment Feasibility Study]

    Is the project management structure defined: working group, chair, project team?
    No

    [Response was provided in the Investment Feasibility Study]

    What categories of experts and consultants have already been involved at the project preparation stage?
    Strategic consultants

    [Response was provided in the Investment Feasibility Study]

    Are there plans to involve experts and consultants for further implementation of the project?
    Yes

    [Response was provided in the Investment Feasibility Study]

    Risk assessment

    Technical riskDefinedUndefined
    Operational riskDefinedUndefined

    Organizational events

    ResponseDefinedUndefined
    Results of the feasibility analysis
    Project Preparation Program Engagement and Funding Needs

    Is there ongoing cooperation or support within the framework of international technical assistance (ITA) or from other donor or government agencies?

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

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

    None of the options are applicable

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

    None of the options are applicable
    Need for financing

    Does the project require additional funding for preparation?

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

    Project Approval History

    DateDecision NumberPortfolioProject StatusDecisionReasons
    26/02/2026SP-L-260226-33D150AFCommunity SPInvestment Feasibility StudyInclude-
    06/03/2026SPP-L-060326-9B5EB47ECommunity SPPInvestment Feasibility StudyInclude-