0. bioheat 100_ukraine_regional_action_plan_biomass_supply_chain_150225

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Final draft, for discussion purpose 1/26 0. Bioheat 100_regional_action_plan_Biomass_supply_chain_150225 Kiev – Brussels February 2015 “BioHeat 100”, regional approach for a renewable energy transition in 3 regions of Ukraine 1 PREAMBLE. As we will show, the potential for the use of biomass for district heating in Ukraine is extremely important and can give huge benefits to Ukraine as well as Western-Europe. Ukraine uses 9 billion m3 of Russian gas annually for district heating purposes. This is equivalent of foreign currency transactions of € 3 billion. The untapped biomass potential in Ukraine can compensate for ALL these gas imports for district heating! The key potential macro indicators are for a full energy transition dedicated to district heating: Annual reduction in foreign currency requirement 1 : € 2.7 billions Annual savings in fuel cost (biomass vs. fossil: € 130millions Creation of direct jobs (supply chain) in rural areas: 200,000 jobs Creation of indirect jobs (boiler’s manufacturing, …): cca. 150,000 jobs Annual savings in CO2 and green house gas emissions: 17 millions tons Major contribution to energy independence and significant contribution to independence from foreign supplier(s) Important stimulus of the local economy, agriculture and industry. This energy transition is moving ahead. Many municipalities are replacing outdated fossil fuel boilers by new biomass boilers. The key element in the implementation of the sustainable use of biomass is to develop a strong, reliable and sustainable upstream biomass supply chain dedicated to bioenergy purposes (district heating). A major asset to ensure a stable and sustainable supply of primary solid biofuel. The project partners have unique experience in creating and maintaining this supply chain and we consider this as the most important aspect of this project proposal. This proposal “Bioheat 100” describes a first step towards achieving the above benefits by launching a project to replace 100 million m3 of gas imports and replacing them with locally grown and harvested biomass. The biomass raised will be supplied to district heating organizations. Summary of the "bioheat 100" Each year, fossil energy savings 100.000.000 m3/year Replacement by 278.000 tons biomass/year Investment in the supply chain 1.260.000€ for technical assistance 13.460.000€ for combiners,… for the supply of biomass boilers: 210 units-1MW Budget savings (-) /year on the fuel costs -2.200.000€ biomass vs. Fossil Local value chain creation (energy independency) 29.200.000€ vs. import of energy Contribution "Bioheat 100" to Naftogaz subzidies cut (32Bio HRN-2Bio$) 1,5% for 2015 CO2 savings 190.000 tons/year Jobs creation 2.200 jobs (FTE) It must be noticed that the same sustainable biomass supply chain may be used for the supply of biogas plant and, last but not least, to trigger the biobased economy.

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Page 1: 0. Bioheat 100_Ukraine_regional_action_plan_Biomass_supply_chain_150225

Final draft, for discussion purpose

1/26 0. Bioheat 100_regional_action_plan_Biomass_supply_chain_150225

Kiev – Brussels February 2015

“BioHeat 100”, regional approach for a renewable energy transition in 3 regions of Ukraine

1 PREAMBLE.

As we will show, the potential for the use of biomass for district heating in Ukraine is extremely important and can give huge benefits to Ukraine as well as Western-Europe.

Ukraine uses 9 billion m3 of Russian gas annually for district heating purposes. This is equivalent of foreign currency transactions of € 3 billion. The untapped biomass potential in Ukraine can compensate for ALL these gas imports for district heating!

The key potential macro indicators are for a full energy transition dedicated to district heating:

• Annual reduction in foreign currency requirement1: € 2.7 billions • Annual savings in fuel cost (biomass vs. fossil: € 130millions • Creation of direct jobs (supply chain) in rural areas: 200,000 jobs • Creation of indirect jobs (boiler’s manufacturing, …): cca. 150,000 jobs • Annual savings in CO2 and green house gas emissions: 17 millions tons • Major contribution to energy independence and significant contribution to independence from foreign

supplier(s) • Important stimulus of the local economy, agriculture and industry.

This energy transition is moving ahead. Many municipalities are replacing outdated fossil fuel boilers by new biomass boilers.

The key element in the implementation of the sustainable use of biomass is to develop a strong, reliable and sustainable upstream biomass supply chain dedicated to bioenergy purposes (district heating). A major asset to ensure a stable and sustainable supply of primary solid biofuel.

The project partners have unique experience in creating and maintaining this supply chain and we consider this as the most important aspect of this project proposal.

This proposal “Bioheat 100” describes a first step towards achieving the above benefits by launching a project to replace 100 million m3 of gas imports and replacing them with locally grown and harvested biomass. The biomass raised will be supplied to district heating organizations.

Summary of the "bioheat 100"

Each year, fossil energy savings 100.000.000 m3/year

Replacement by 278.000 tons biomass/year

Investment in the supply chain 1.260.000€ for technical assistance

13.460.000€ for combiners,…

for the supply of biomass boilers: 210 units-1MW

Budget savings (-) /year on the fuel costs -2.200.000€ biomass vs. Fossil

Local value chain creation (energy independency) 29.200.000€ vs. import of energy Contribution "Bioheat 100" to Naftogaz subzidies cut (32Bio HRN-2Bio$) 1,5% for 2015

CO2 savings 190.000 tons/year

Jobs creation 2.200 jobs (FTE)

It must be noticed that the same sustainable biomass supply chain may be used for the supply of biogas plant and, last but not least, to trigger the biobased economy.

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Table of content.

1 Preamble. .......................................................................................................................................... 1

2 Competitive local biofuel in Ukraine for district heating. ................................................................... 3

2.1 Problems to solve for a biomass supply chain. ............................................................................. 3

2.2 Expected Impact’s ....................................................................................................................... 6

3 Implementation: the Biomass Trade Centre (BTC). ............................................................................ 7

3.1 Technical assistance department. ................................................................................................. 7

3.2 Professional body Department. .................................................................................................... 9

3.3 The investment fund department. ...............................................................................................10

3.4 Overview of the BTC’s structure and contributions. ...................................................................11

3.5 Pilot regions. ..............................................................................................................................12

4 Access to finance. .............................................................................................................................13

4.1 Revenues model. ........................................................................................................................13

4.2 Budget for the Technical assistance Dpt. ....................................................................................14

4.3 Capital expenditures. ..................................................................................................................15

4.4 Working capital. ........................................................................................................................15

4.5 Agenda. .....................................................................................................................................15

5 Summary of the financial request. .....................................................................................................16

6 Conclusion. ......................................................................................................................................17

7 Consortium at a glance......................................................................................................................17

8 Appendicies. .....................................................................................................................................18

8.1 Bioheat intitiative, figures in detail. ............................................................................................18

8.2 Indicative price of the biomass ready for delivery (Feb. 2015 in €/T). .........................................19

8.3 Indicative price per GCal ready for delivery (Feb. 2015 in €/GCal). ...........................................19

8.4 Working capital (€/T). ................................................................................................................19

8.5 Detailed budget for the technical assistance: location, staff amplitude. ........................................20

8.6 Consortium members (February 2015) .......................................................................................21

8.7 Bioenergy potential, in figures ...................................................................................................25

8.8 Letters of support. ......................................................................................................................26

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Examples of saw dust, straw or reed burned, stumps and logs

2 COMPETITIVE LOCAL BIOFUEL IN UKRAINE FOR DISTRICT HEATING.

With an untapped potential, Ukraine has the capacity to shift its energy from the conventional fossil source to renewable energy and biomass in particularly.

1° With a local sourcing of predictable and storable renewable energy, the biomass, 100% of the energy budget will remain in the specific territory, in Ukraine.

2° the mobilization of the local biomass will contribute to create a local value chain with more jobs, with more perspectives for a raw material usually burned.

The biomass mobilized locally is competing well with the price of the subsidized gas. It means that any ton of biomass mobilized for heating purpose will be a government budget friendly decision, not or less harmful for the state or local budget (25% less subsidies). These benefits are neutralized if the gas price will reach 245$/1.000m3.

It will significantly contribute to re-adjust the import-export balance.

Gas price UAH per 1.000m3

(33GJ) $ € GJ Gcal

end user price

€/Gcal

savings gas price vs.

other fuels

Subsidies €/Gcal

Subsidized gas (UA)-2014 1832 167 149 33 7,9 19 -49% -18,3

Biomass (UA), average price, no subsidy

113 100 15 3,6 28 -25% -9,1

Natural gas (imported) >01/02/2015 329 293 33 7,9 37 100% reference

Natural gas (imported), reference price

price target 485 432 33 7,9 55 na

*GJ for giga-joule, GCal for giga-calorie, MWh for megawatt per hour

2.1 PROBLEMS TO SOLVE FOR A BIOMASS SUPPLY CHAIN.

2.1.1 MOBILIZING THE ADHOC BIOMASS.

The untapped potential must be mobilized. A clear signal has to be sent by the suppliers to the local operators (district heating) about the available quantities and the quality to trigger more sustainable initiatives and a long term stable price.

2.1.1.1 Quality and origin. A biomass supply chain can be represented as following (schema below), from the forest, fields to the end users.

A. Woody biomass, soft and hard wood, woody residues and short rotation coppices (salix, edge,..) a. Wood logs are obviously already used. Such biofuel has low efficiency when burning in open fire

with high emissions issues. b. Wood chips and wood pellets are both an international format. This kind of biomass is widely

used for production of heat in Western Europe and in Ukraine. Ukrainian market prices are competing with fossil energy and imported fossil energy especially (-20%, February 2015).

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c. The origin must be certified e.g. the legality of the sourcing especially to avoid illegal cutting and the depletion of the forests.

B. Agro biomass: straw (wheat, barley, maize) reed and energy crops (switchgrass, Miscanthus) a. Such material is always harvested in loose (straw). b. A first conversion is the baling of the straw. c. A later conversion is the densification into pellets or briquettes to improve the storability, the

handling and the energy content and the cost per ton and per GJ.

Biomass, especially agro biomass, is highly seasonal and the time slot to gather the biomass is of crucial importance. The biomass harvested could not compete with food cropping.

Last but not least, the combustion behavior may be limiting the usage: some boilers are only dedicated to woody biomass (with a low ash content, below 1%) while some others are multi-biomass.

2.1.1.2 Price. All prices in this document were converted into €.

Indeed, the fall of the Ukrainian currency vs. foreign currency is one of the main challenge for the economy (chart on the right).

The prices of biomass available were gathered and reviewed in February 2015 with the assessment of several stakeholders and experts active in Ukraine.

The average price per ton is around 100€/T incl. VAT, transport and storage. The reference prices per kind of biomass are under 8.1.

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Converted into € per Gcal, the price of the biofuel delivered in the boiler room for an average price of 29-30€/Gcal incl. VAT. The conversion in €/Gcal (and MWh) and the price list is under the appendix 8.2.

This upper price is fairly covering all operational expenditures, economical margin and taxes for the primary energy, the fuel.

The difference between the biomass and the reference price for fossil energy, delivered to the boilers houses is 3 to 30% cheaper with an averaged value of 20% depending the biomass used (see comparative under 8.3).

Results: the primary energy is cheaper. No energy is imported, no foreign currencies paid abroad.

2.1.1.3 Quantity. Available biomass: assuming the target of this project to replace 100.000.000m3 gas (100.000x1.000m3), with an energy equivalent of 33GJ/1.000m2, it will require approximately 270.000tons of biomass each year.

For agro biomass, the 270.000T would be mobilized on a surface equivalent to 90.000ha with wheat or barley straw (which are usually burned).

Improving the range of raw material: According to the statistics, 8% of the farmlands in Ukraine are not in use, resulting in an impressive 25.000km2 or 2.5 millions Ha to dedicate for high yielding crops, contributing to the regional (national) energy independency. These marginal lands have the potential to deliver each year the energy equivalent of +/-7.5 billions m3 gas for district heating.

Figure 1 Trial plots of Miscanthus – Institute of Bioenergy Crops and Sugar Beet - Kyiv, str. Klinichna, 25

2.1.1.4 Interim storage and security of supply. Biomass is a highly seasonal product and the time slot to gather the biomass is of crucial importance.

All biomass for heating purposes is used during the winter season therefore the interim storage and the security of supply must be resolved prior to the season and the quantities must pre-financed. This target is requiring working capital explained and detailed below under 4.4.

The storage’s security will play also a significant role for stabilizing the prices.

2.1.2 CERTIFICATION & SUSTAINABILITY.

The sustainability of the biomass supply chain is an important criterion for the bankability of the “bioenergy and biobased economy”, especially in an agricultural country like Ukraine.

The supply chain must deliver clear evidences

- of CO2 avoidance, - that it’s contributing to preserve the environment, not being harmful for the air, soil (soil’s carbon

balance) and water, namely a monitoring of the organic soils carbon stock changes and the very sensitive topic of LULUCF (sector land use/land use change/forestry),

- that it’s contributing to the local prosperity and the social well being.

The standard NTA8080 will be applied to assess the sustainability of the supply chain in compliance with the sustainability requirements of the EU.

By a sustainable approach, the promoter’s are intending to create a positive environment and to replicate the model with a strong signal to the investors. It will allow also to a better transparency on the available raw material to avoid speculation or/and shortage for the future.

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This kind of supply chain can welcome others investor’s, end users like the biogas plants (with injection of biogas into the grid), the biobased economy with production of bio-ethanol, bio-butanol and others bio-chemicals.

2.1.3 EQUIPMENT’S, INFRASTRUCTURE AND SKILLS.

This supply chain is requiring also the ad hoc infrastructure and technical means like tractors, choppers, trucks and storage capacity in quantity, in time and at the right place.

Equipment’s exists but is very probably not enough to cover the entire needs. Therefore a “pooling and sharing” facility must be supported for renting on a daily, weekly basis the specific equipment: choppers, shredders, equipment’s for densification of the agro-biomass (briquettes).

This is also requiring specific human skills for the upstream biomass supply chain. Especially, certification bodies for the sustainability assessment must be trained.

2.1.4 FINANCING.

The main issue is the financing. Ukraine is ranking as the poorest country of Europe and is at war.

The main hurdle is the capacity to borrow money from local commercial banks. For a lending facility from abroad, the short-term risk is the devaluation of the local currency, the Hryvnia vs. $ and €.

However, the risk can be mitigated by the export of some 5-7% of biomass to neighboring countries, Poland and Western Europe, without depleting the available stock for Ukraine.

2.2 EXPECTED IMPACT’S

2.2.1 EXPECTED RESULTS#1: STABLE PRICE FOR A LOCAL RENEWABLE FUEL AND LOCAL JOBS CREATION.

Biomass for energy will become a local commodity with the target to supply the equivalent of 100 millions m3 gas each year. During the three years project, in total 300 millions m3 of gas is being replaced by biomass in sufficient quantities to supply 600 boiler’s rooms of 1MW each.

A price’s target approach will be implemented:

- for the biomass and the supply chain costs with a upper price’s target around 120$-100€2 per ton equivalent to 25€/MWh- 30€/Gcal vs. 37€/Gcal for gas, a difference of about -20%.

- for the heating equipment (boilers) with a price per kW thermal (200€/kW).

It will result in an economical model able to pursue the necessary investments, to foster its replicability and to ensure the pay back of the lenders as well as a significant contribution to reduce the state budget deficit by a cheaper fuel costs, a reduction of the subsidies and the energy independency with no energy imported.

Summary (see detailed calculations under 8.1): the figures are estimated as the followings achievement’s per year (for a 3 years operational program). The consortium partners are targeting to achieve the following targets in three selected regions:

Summary of the "bioheat 100"

Each year, fossil energy savings 100.000.000 m3/year

Replacement by 278.000 tons biomass/year

Investment in the supply chain 1.260.000€ for technical assistance

13.460.000€ for combiners,…

for the supply of biomass boilers: 210 units-1MW

Budget savings (-)/year vs. the imported fuel costs -2.200.000€ biomass vs. Fossil

Local value chain creation (energy independency) 29.200.000€ vs. import of energy Contribution "Bioheat 100" to Naftogaz subzidies cut (32Bio HRN-2Bio$) 1,5% for 2015

CO2 savings 190.000 tons/year

Jobs creation 2.200 jobs (FTE)

2 The wood pellet market in Rotterdam, a market dedicated to large utilities, were traded around a flat rate of 130€/ton CIF during several years.

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In order to work, the model must become attractive for investors and will become a “nursery” for micro-financed local enterprises (especially in the supply chain). It must deliver a strong signal to the business community.

2.2.2 EXPECTED RESULTS#2: INNOVATION, INDUSTRIAL POTENTIAL AND ITS REPLICABILITY:

The key problem is the manufacturing and the ad hoc financing of the boilers able to burn local biomass. We assume that the boilers will have a nominal power ranging from 300kW to 2MW, such capacity is not available “of the shelf” and it will require a significant industrial program among the domestic and potential foreign suppliers.

The industrial potential and benefits for Ukraine are important with the supply of boilers, heat exchangers, metering devices but also with tractors, combiner’s, silo’s,...

Later, excess biomass could be exported to trigger revenues in foreign currencies or to attract foreign investment in Ukraine looking for an existing biomass supply chain (bioethanol 2G, biobased chemistry).

Ukraine has the potential to become a biobased hub for Western Europe and for its supplies in biomass. Some letters of support are enclosed to witness this possibility (see appendix 8.8).

2.2.3 EXPECTED RESULTS#3: IMPACT ON MACRO ECONOMICAL DATA:

This proposal has not (yet) the ambition to impact the macro economical data. However, per increment of 100 millions m3 of gas being replaced, the local purchase of biomass will contribute to reduce the cut to the State company Naftogaz by 1,5%. This impact, combined with the impacts #1 and #2, will very deliver an excellent substrate for micro enterprises, for local businesses.

3 IMPLEMENTATION: THE BIOMASS TRADE CENTRE (BTC).

To achieve this project, the consortium has developed the following actions managed by the Biomass Trade Centre. Similar organizations are in operation in Slovenia, Austria Poland, Italy,…

To implement a transparent working method, the umbrella organization will be structured on a voluntary mode defined with the donor’s. Then , each BTC will then be implemented by a tender or a public call with guidelines and open to trigger local initiatives.

The structure of the BTC is tailor made for Ukraine and will perform several duties under 3 main legal organizations.

3.1 TECHNICAL ASSISTANCE DEPARTMENT.

The technical assistance department will have the duties to implement and to trigger more local initiative. This department may be liaised with an existing legal body or NGO.

3.1.1 DUTY#1: ASSISTANCE FOR LOCAL SUPPLY CHAIN WITH RESPECT TO STANDARDS AND REGULATIONS.

The Government Directive 1017R gives the mandate to local institutions to support use of biomass. Among the services delivered by the BTC, an field’s assistance performed by local and foreign experts will be offered to implement local pelletizing stations and plant (stationary or mobile units) in order to trigger efficient, sustainable and budget wise local supply chain. This service will equal 80 to 100 man/days per year. The service will be performed by workshops organized at the local level.

Among the task, the experts will stress on the importance to respect the standards and the market regulation as defined by the State Agency for Energy Efficiency (SAEE).

3.1.2 DUTY#2: ASSISTANCE FOR IMPLEMENTING ENERGY CROPS.

The implementation of high yielding crops and short rotation coppice is an important asset and strategy to diversify the sourcing and to foster on the long term the bioheat and for a biobased economy. These cultures are dedicated only for biobased purposes (1°) and are developing locally more attractiveness for future investments (2°).

In Europe, Ukraine has the potential and the opportunity to achieve very realistic results considering the surface of the entire country and the unused potential.

By establishing high yielding crops (14GJ/ton x 7-8Tons/ha), the abandoned lands newly mobilized (2,5millions Ha across Ukraine), have the potential to deliver the equivalent of +/-7,5 billions m3 gas for district heating. This operation will be started with the collaboration of the Rivne Marketing Research

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Center (RMRC) on a surface of 100ha being incremented step by step. A team of 6 local persons will establish the trial plot on 100ha and organize permanent promotion of this initiative.

The region of Rivne has a higher budget for the technical assistance due to the assistance and expenditures for the trial establishment of short rotation coppice (175.000€ in year#1) and the necessary staff (6 FTE) and experts to hire.

The office in Rivne will act also as representative for the Biomass Trade Centre for the “pooling and sharing” facility. The institute for bioenergy crops and sugar beet (based in Kyiv) would also provide assistance and experts.

3.1.3 DUTY#3: PLATFORM FOR POOLING AND SHARING EQUIPMENT’S.

Each regional BTC’s office will pool the demand and the offer of equipment like tractors, combiners, choppers.. by a matchmaking for the demand and offer via a pooling and sharing platform (P&S).

3.1.3.1 Matchmaking, “what”: demand and offer of equipment’s.

Local entrepreneurs willing to gather local biomass will be welcomed to order or to rent available equipment offered on the platform (with or without operators). All companies active in the biomass in Ukraine with heavy equipment will be welcome to join the pooling and sharing facility.

The target is also to tackle the shortage of financing for acquiring equipment, new or 2nd hand (1°) and to optimize the locally available fleet of equipment’s (2°).

3.1.3.2 Matchmaking, “where”: the Mapping tool

The BTC will also implement a trans regional mapping system for local harvesting with the identification of technical available biomass. Via the mapping tool “biomass platform”, the heart of the BTC, any operator could introduce request and offer and will declare publicly the available quantities of biomass that he will be made public with up 50 user’s rights per region enabling creating a real procurement and supply network of feedstock.

This is not precluding any business-to-business deal for the supply of biomass. A better transparency of the biomass stream is highly recommended to avoid oversupply or shortage of biomass.

The mapping tool is the backbone of the BTC to track and trace the technical potential. It will be used to assess the sustainability.

3.1.4 DUTY#4: CERTIFICATION OF THE SUSTAINABILITY.

The biomass mobilized, a limited natural resource, will be identified and traced to avoid several disturbances:

- competition with crops lands - depletion of the carbon balance of the soil, driving the lands to less fertility - fighting illegal wood cuttings.

For this duty, the above mapping tool will act as “biomass platform”. Any quantity submitted via the platform will need to fill in a short questionnaire (via smartphone) and to declare data to assess the sustainability: origin, mileage, hours of operations,…

The contribution of the local stakeholders is not mandatory. However, the benefits are to deliver a certified biomass compliant with the sustainable criteria for the benefits of the local populations.

The criteria NTA8080 will be implemented. This certification scheme was already positively tested in Ukraine during the project “Pellets for Power” (2011-2013). This sustainability will be financed from a fee equivalent to 1€/Gcal on each auction and sales managed by the BTC.

3.1.5 DUTY#5: AUCTIONS.

The biomass mobilized could be used directly by local boiler’s rooms and “oblteploenergo” in the frame of a B2B contract. In these cases, the price delivered by GCal could be lower (30€/ton, 8€/MWh, 9€/GCal) than the targeted price of 29-30€/GCal.

The same end users may agree to auction the quantities in demand to improve the competitiveness of the price. A fair price level (maximum 30€/GCal) is recommended to deliver a clear signal about the economical environment near the suppliers and to promote much more local and long-term initiatives.

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3.1.6 DUTY#6: SECURITY OF STORAGE.

The BTC will establish and recommend a security of storage for the biomass (15%) with 30 silos being installed in the regions (pic right) or existing flat storage that will be refurbished. This system is currently in use for oil&gas but not for biomass.

With the security of storage, Ukraine will become the first country in Europe to implement such secured system for biomass, a very positive signal to investors and stakeholders aiming a price warranty and a strategy to stabilize the prices.

Indeed, boilers efficiency, moisture content of the biomass and climate variation (long and harsh winter) will significantly impact the biomass in demand and the necessary quantities to supply per season.

Another benefit of the registration of storage is the possible pre-financing of the operations. In this case the BTC will act as a “warehouse grain receipt” model. The money paid upfront will be guaranteed by the future production that will be pledged and stored in adhoc warehouses.

3.2 PROFESSIONAL BODY DEPARTMENT.

This department will be incorporated in a separate legal body, distinctive from the technical assistance. Its activity is highly connected with the technical assistance especially to fill gaps for the mechanization of the biomass harvesting.

3.2.1 OFFER OF EQUIPMENTS FOR RENTING:

This department will acquire and finance specific portable equipment that will be rented to enhance the biomass mobilization:

- one heavy duty wood chippers (whole tree chipper): supplier CBI (US), the capacity of the 6400 model is about 150 metric tons or 450m3/h for logs with a diameter of 300 to 500mm; an additional crane must be used to load the trunks, logs into the conveyor. Annual capacity of 150.000T, equivalent wood chips)

• one powerful mobile drum chipper: supplier LHM Hakkuri Oy(Finland), with a capacity of 250m3/h for logs with a diametre of 10 to 55cm, mounted on truck and equipped with a crane and a separate cabin, operated by 1 operator who is also the truckdriver. Annual capacity of 100.000m3, equivalent of 30.000Tons of wood chips/year

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- three mobile units for straw biomass densification: supplier Asket (Poland), the unit can operate on the field with its power generation (equipped with power genset); the output is about 1T per hour of briquettes from straw, reed, energy crops. Annual capacity of 3-4.000T/year per unit of agro biomass, in total 12.000T/year. The performances of this equipment were validated by an independent survey in the frame of the EU Environmental Technology Verification pilot Programme. -

Figure 2 - Example BIOMASSER® MOBILE type BM9P mounted onto a semi-trailer

The revenues model of the professional department of the BTC will be the renting fee of the equipment.

3.3 THE INVESTMENT FUND DEPARTMENT.

3.3.1 IMPROVMENT OF THE INVESTMENT CLIMATE.

It is clear that now donors are reluctant to provide grants or subsidies to private sector for an activity, which is supposed to provide revenue/profit to individual or companies.

The same donors are also very much reluctant to ask public bodies to manage funds to be allocated to beneficiaries in a unclear environment.

The Investment Fund is incorporated with the help of professionals with several purposes:

- to invest in Small and Medium Enterprises for the bioenergy or biobased purposes, - to provide capital to successful entrepreneurs.

Such approach has proved to be very efficient in a transforming economy.

Donors investing in the fund will support part of the risk and will allow to leverage more financial means from private investors that will be confident to invest monies in a national strategic business, a less risky fund.

The BTC (technical assistance and professional body) would contribute to screen the proposals and would influence the investment decision of the investment fund’s committee. For example, the investment fund could also invest in the Platform for sharing tools or equipment’s pool to be rented out.

An independent private fund management team will be contracted to manage the fund.

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3.3.2 STRUCTURED FINANCING & MICROFINANCE.

Specific attention will be dedicated to the microfinance. Especially for the upstream supply chain where many private local stakeholders and workers could be involved.

The access to the job is restricted among others by the financing of transport material, chain saws, .. As the BTC will implement a platform for material pooling and sharing (rent-your-equipment), the development of the upstream supply chain will be promoted by micro financing for handy or light equipment while heavy equipment would be rented.

The micro financing is also a possible solution for the acquiring local heating devices for communities.

A team of 3-4 people based in Kiev, Prague Vienna will structure the financing, the capacity building to fill in business plan and to promote the investment.

3.4 OVERVIEW OF THE BTC’S STRUCTURE AND CONTRIBUTIONS.

The benefits offered by the BTC to both suppliers and customers are significant (renting equipment, organization of storage capacity, ,..) to trigger the use of the BTC ‘s by the local stakeholders as a “win-win” platform. However, the Ukrainian market may remain unpredictable.

This schema below is also illustrating the varieties of operations, format, equipment’s that will be mobilized for a safe and sustainable supply chain.

Technical assistance department (NGO or private company Ltd.)

assistance, control of standards, matchmaking, sustainability assessment, mapping tool

>> under governemental control (to be precised)

Regional district heating companies (private - public)

regional agroholdings

regional forest administration

regional energy crops

Professional department (renting of equipment)

Investment fund

Auction dpt.

Interim storage for security

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3.5 PILOT REGIONS.

Three regions were identified with local Ukrainian public organizations and private companies acting as regional leader.

Region Project Leader Estimated territory

for biomass supply/Km2

Estimated boilers to change

Vinnitsyia Traficon/VOTE 19.000 53 (+50)

Rivne Rivne Marketing Research Center, City of Rivne

19.000 17 locations for an equivalent of 500GWh

Hloukhiv (Chernigiv) UkrBioEnergy Ukraine-Agri 17.000

More regional leaders will be identified during the project to replicate the project and to trigger the benefits to others regions.

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4 ACCESS TO FINANCE.

With the European economical turmoil and the Ukrainian context, the financing is a major key issue. The consortium is working to secure the financing from several international financing institutions (IFI’s) and donor’s for the first stage. For the second stage, usually large IFI’s (typically EBRD, IFC) are lending over a threshold of 20 to 30Mios$. Large IFI’s will drive also others investors in their track.

By an intensive field’s approach and operations aggregated together, this project is intending to address a technical, operational and financial solutions combined.

The BTC will be a legal body, incorporated in Ukraine under the form of an NGO or, more ideally, a commercial cooperative company. As a pure start up, the BTC has no track of records what will be a significant hurdle to start and finance such operation where cash is king.

4.1 REVENUES MODEL.

The above services for the certification, the storage, ..have a cost.

The BTC will need to rely on an operational team and operational expenditures must be engaged. The team will organize two streams of revenues.

a) The revenues are coming from de certification scheme will be billed and paid in equivalent Gcal with a target price around 1€/Gcal (equivalent to 3 to 4€/ton).

With a target for replacing 100 millions m3 of the gas (equivalent to 850.000GCal), the revenues could exceed 1million€ per year. However, at this stage the exact figures could not be defined accurately as the BTC was not yet promoted and incorporated.

b) The storage security benefit will be billed around 4-5€/T per 6 months. Exact figure have to be specified on a case by case basis

c) The revenues from the renting of the equipment acquired by the professional department of the BTC and rented will be accounted and dedicated mainly to reimburse the loans.

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4.2 BUDGET FOR THE TECHNICAL ASSISTANCE DPT.

This initiative must rely on a technical assistance budget and grants to be implemented. The stakeholders are various (producers, farmers, loggers, communal heating companies) and the BTC has the aim to be a link between the stakeholders in a transparent mode.

To set up the BTC, a working team of 8 to 10 people has to be implemented to achieve the duties:

- 3 to 4 people for biomass manager platform, inclusive the pooling and sharing facility - 2 senior experts in sustainability assessment and training of additional controllers - 3 to 4 people for the entire management, communication and assistance; for the energy crops

implementation, part time expert (foreign and Ukrainian) will be hired.

Year#1 year#2 Year#3 Year#4

Biomass Trade Centre - expected revenues 190.000 760.000 1.520.000 1.900.000

Storage fee: interim and security 4€ per ton 30.000 120.000 240.000 300.000

Biomass Trade Centre - expenditures Staff Location 1.270.000 980.000 790.000 640.000

Margin (EBT) -1.080.000 -220.000 730.000 1.260.000

Taxes 25% 0 0 -182.500 -315.000

Results 36 FTE -1.080.000 -220.000 547.500 945.000

Technical assistance requested year#1+2 & repayment 1.270.000 270.000 -547.500 -945.000

The figures are detailed under the appendix 8.5.

Considering the political turmoil, any investment program is very doubtful near private investors or companies.

The consortium is asking a technical assistance (TA) budget amounting 1.5 million€ to implement the 3 years program and the project.

The project will be implemented by a skilled staff working within a national Ukrainian legal entity (NGO or cooperative, a tax payer legal person).

A possible repayment of the TA is scheduled from the year#3.

The main revenues are the fee paid for the biomass under management (sustainable certification, security of storage) and equivalent to 1€/Gcal.

The budget for this technical assistance will be used mainly

- for hiring local expert and staff (40% of the expenditures) - Foreign experts are representing 29% of the expenditures - The remaining balance will cover office costs, travel expenditures and the renting of storage

capacity in the 3 regions.

Year#1 year#2 Year#3 Year#4

Technical assistance requested year#1+2 & repayment 1.270.000 270.000 -547.500 -945.000

Local expert, manpower & expenditures 605.000 545.000 322.500 70.000

contribution to the technical assistance year#1 48%

EU expert & purchase (license) 320.000 275.000 110.000 80.000

contribution to the technical assistance year#1 25%

Offices supplies, travel, miscellaneous, security of storage 336.000 151.500 167.500 167.500

contribution to the technical assistance year#1 26%

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4.3 CAPITAL EXPENDITURES.

a) The main capital expenditures will be the purchases of the densification equipment (chipper, briquette press as described above under 3.1. ) The suppliers are selling their equipment with the support of their national EXIM lending facility. This is not yet 100% confirmed as the BTC in Ukraine has no evidence and track of record (as “BTC”). However, 50% must still be financed. The equipment will be rented on a economical basis to ensure the pay back of the loan and interests…

€ Supplier Capacity T/year

Price CIP €

Import duties &

VAT (25%)

Final price €

Loan EXIM

Financed by EXIM

Repayment period

Remaining to finance

mobile whole tree chipper

CBI (US) 150.000 865.000 216.250 1.081.250 50% 540.625 6 540.625

mobile drum chipper

Lhmhakkuri (FI)

80.000 300.000 75.000 375.000 50% 187.500 5 187.500

Mobile agrobiomass briquettes

Asket (PL) 7.200 600.000 150.000 750.000 50% 375.000 6 375.000

Storage (30 units) UA 37.500 875.000 875.000 0% 0 5 875.000

Maping tool - MHG Platform

MHG (FI) 300.000 75.000 375.000 60% 225.000 5 150.000

Total 270.000 2.940.000 520.000 3.460.000 1.330.000 2.130.000

* duties and VAT have to be précised with the local tax authority.

b) An additional investment will be the implementation of the mapping system supplied by MGH. The revenues will be generated by the records and registration via the website on the mapping tool “Biomass platform”. Budget: 300.000€ with repayment in 6 years.

Risks: the main obvious risks in Ukraine are the war and currency risks. This is the reason to require technical assistance to launch the operations. A risk insurance from MIGA or similar organization will be contracted.

4.4 WORKING CAPITAL.

Depending on the available financing, a bridge loan must be mobilized to pre-finance the gathering of the biomass. The harvesting period must be a precedent to the consumption period.

Assuming a price of 90-100€/ton, such operations would require about 50% for the operational expenditures like wages, and fuel, prepayment of the raw material. The experience is showing that 50€/ton must be prefinanced for agrobiomass, while this need is around 35€/ton for woody biomass.

The detailed calculation is under the appendix 0.

With a target for replacing 100 millions m3 of the gas, equivalent to 250.000tons biomass, a lending facility of 8 to 10mios€ must be mobilized.

The amounts borrowed will be pledged by the forthcoming production and deliveries, a similar system than the “warehouse grain receipt” a very tangible system. The repayment will be following the biomass supplies.

4.5 AGENDA.

With many contacts in place, letters of supports the consortium is expecting to finalize the initiative by March-April 2015.

A) The contractual and legal issues and funding will be addressed during a workshop organized in Kiev (April 2015) with 8 to 10 experts and about 75 to 100 shortlisted attendees from Ukraine and Western Europe, this three days seminars will stress on the following topics

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a. the local mobilization of the biomass and the balance between offer and demand, standards,.. (day#1)

b. the technical standards (tractors, combiners) and the industrial plan to fill the gap in the physical mobilization of the biomass (day#2)

c. the definition (fine tuning) of the business model with contribution of local stakeholders (legal aspects) and the conclusions to be presented to the IFI’s, investors (day#3)

The expected outcomes are the definition of a precise organigram with clear distribution of responsibilities and duties among the stakeholders, a schedule of the operations and first plan to expand the BTC in others regions.

B) The consortium can already count on a time slot for a oral presentation during the European Biomass Conference being held in Vienna (June 2015)

C) The important deadline is to be ready for the straw harvest in June-July 2015: staff, office, financial means have to be ready for the 3Q2015. The first storage must be ready by October 2015 prior to the heating season in order to deliver a strong signals to the investor’s and stakeholders..

D) A general International conference will be organized in cooperation with SEC Biomass in September 2015 in Kiyv.

5 SUMMARY OF THE FINANCIAL REQUEST.

Total budget in request.

Financial request Year#1 year#2 Year#3 Year#4 Total in demand

Outstanding situation (4

years)

Technical assistance 1.270.000 270.000 1.540.000

Repayment -547.500 -945.000

Outstanding situation 1.270.000 1.540.000 992.500 47.500 47.500 3%

Capital expenditures 3.460.000

EXIM 1.330.000 Others means 2.130.000

Repayment: 5 years -640.000 -640.000 -640.000

Outstanding situation 3.460.000 2.820.000 2.180.000 1.540.000 1.540.000 45%

Working capital ** 2.520.000 10.070.000 20.140.000 25.170.000 10.000.000

Repayment -2.130.000 -8.550.000 -17.110.000 -21.390.000 ** to be discussed Outstanding situation (season' end) 2.520.000 1.520.000 3.030.000 3.780.000 3.780.000 38%

Total oustanding loan & TA (from int'l donor's & agencies)

7.250.000 5.880.000 6.210.000 5.370.000

The loan facility for the working capital (minimum 2,5Mios €maximum 25Mios€ with average 10Mios€) must be defined with the IFI’s.

B) Expected benefits (figures):

For the year#1, the target to achieve the mobilization of 270.000T (equivalent to 100 mios m3) is not realistic. 50.000T is the “worse case scenario” considering also the late start of the project during the year#1.

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Expected benefits (cumulated) Unit Year#1 year#2 Year#3 Year#4

Technical assistance (TA) € 1.270.000 1.540.000 992.500 47.500

Capital expenditures € 3.460.000 2.820.000 2.180.000 1.540.000

Working capital € 2.520.000 1.520.000 3.030.000 3.780.000

Total oustanding loan & TA (from int'l donor's & agencies)

Mios € 7 6 6 5

Amplitude of efforts and results

Fossil energy reduction (gas) x10000m3 21.000 86.000 173.000 217.000

Reduction of foreign balance of payment Mios € 6 25 51 64

Biomass mobilized in tons 50.000 200.000 400.000 500.000

Agro biomass Tons locations and distribution to be specified per each region

Wood biomass Tons

Jobs creation FTE 400 1.600 3.200 4.000

Budget for energy & savings

from biomass Mios € 5 20 40 50

equivalent from fossil energy Mios € 7 28 57 71

Difference & savings Mios € -2 -8 -17 -21

CO2 avoidance TCO2 -33.000 -137.000 -276.000 -347.000

6 CONCLUSION.

As members of the “European biomass community”, we believe and are convinced that this is the way to manage an economic and societal realistic energetic transition.

Additionally, this shift should allow to develop a subsidies free market for public, private heat and to initiate the transition towards ‘bioheat’ across Ukraine for a long lasting energy independency.

7 CONSORTIUM AT A GLANCE.

At the moment, Ukraine authorities are using district heating as energy generation in urban areas. Ukraine may rely on a good operational knowledge and expertise for such energy (gas) generation.

However, the realistic shift from gas to renewable energy (biomass, biogas, solar thermal..) in an efficient way is associated to a tremendous effort in order to reach the energy and budget efficient targets across Ukraine in the following 24-36 months.

The consortium “BioHeat100” is proposing to support, to skill the local Ukrainian operational, scientific, industrial… entities by providing experts in biomass mobilization, transformation and valorization, as well as adapted methodologies to assist the decision makers and the citizen’s representatives in defining the energetic guideline for Ukraine from the optimum technological, environmental and societal point of view.

We believe that this support will be a signal to the IFI’s considering their efforts for Ukraine.

The consortium intends to have an operational quarter based in Kiev initially and, later, in representative Ukraine cities to support and to trigger the local operations. A representative based in the Benelux may coordinate the developments and disseminate the results to the concerned authorities in Western Europe.

The consortium will rely on a transparent approach and should be open to any participants, non profit or profit organizations. The consortium aims to avoid any double functionality with existing bodies or initiatives active in Ukraine (e.g. DemoUkraina, UKeep,..).

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8 APPENDICIES.

8.1 BIOHEAT INTITIATIVE, FIGURES IN DETAIL.

Targets and expected impacts - "Bioheat 100" (€)

A)Target: to replace 100 millions m3 gas per year 100.000.000m3 gas

equivalent MWh equivalent GJ

Equivalent energy 973.000 3.500.000GJ

Equivalent energy in GCal: 0,86GCal for 1MWh 830.000

Equivalent biomass

Average boilers efficiency 90%

100% Wood (17GJ/T) in tons 229.000

or 100% agro by products (14GJ/T) in tons 278.000

B) Replacement of boilers 210 units-1MW per year

CAPEX (€ per thermal unit: 200€/kW th) 200.000 € per 1MWth

Operational hours/year - total hours/year: 8.000h 4.000 hours/year

boilers to revamp, per year 210 units-1MW

Estimated budget for boilers, valves fittings:200€/kw 42.000.000

Budget for the supply chain (storage, combiners,..) - 25% 9.000.000

Working capital (50€/T biomass) 13.000.000

budget for biomass with average price biomass: 100€/Ton VAT incl. 27.000.000

VAT on biomass: 20% 5.400.000

Total CAPEX per year of program 51.000.000

Total OPEX (biomass) per year of program 27.000.000

C) Yearly benefit on fuel bill -2.200.000€

Reference price of fossil energy 293€/1.000m3 =329$/1.000m3

Energy units of gas replaced by biomass x1.000m3, the "target" 100.000 x1.000m3

Yearly budget for imported gas (100 millions m3) - € (OPEX) 29.200.000

Yearly budget for local biomass - € (OPEX) 27.000.000

Contribution "Bioheat 100" to Naftogaz subzidies cut (32Bio HRN-2Bio$) 1,5% for 2015

Minimum econ. yearly benefit on fuel (Fossil energy vs. Local biomass) -2.200.000

pay back period (total CAPEX for boilers/yearly savings on fuel bill) 19 years pay back

Tons CO2 savings (0,2T CO2/MWh gas) per year 190.000

D) Energy independency 95-97%

E) Local jobs creation 2.200 jobs

Manpower budget, labour content as percentage in the biofuel budget: 30% 8.100.000 €

Revenu/Ha for manpower (estimated) 88€/Ha

yearly salary budget:3.600€ - jobs potential in FTE> 2.200 Jobs

Job potential 110 tons biomass/job

F) Surface for sourcing agrobiomass 92.000Ha

supply agrobiomass in equivalent Ha (3T/ha *14GJ/Ha) 92.000 (Ha)

Total GJ/Ha from agrobiomass & energy crops 3.864.000GJ

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8.2 INDICATIVE PRICE OF THE BIOMASS READY FOR DELIVERY (FEB. 2015 IN €/T).

Kind of biomass

ash

cont

ent

pur

chas

e ra

w

mat

eria

l (€)

Har

vest

ing/

bal

ing

Den

sifi

cati

on

Form

at

Stor

age

&

tran

spor

t

Var

ia

Cer

tific

atio

n (B

TC

)

Production costs

VAT Final price (€/T)

5% 1€/GCal 20%

wheat straw >5% 20 15 35 briquette 10 4 3,4 87 17 105

Reed >5% 10 20 35 briquette 10 4 3,3 82 16 98

Cereals (2nd grade) >5% 70

grain 10 4 4,1 88 18 106

Wood logs <2% 35

logs 10 2 2,3 50 10 59

Wood chips <2% 40

chips 10 3 2,2 55 11 66

Sunflower husks 2-5%

45 pellet 10 3 4,3 62 12 74

wheat straw >5% 20 15 45 pellets 10 5 3,4 98 20 118

Salix <2% 35 20 10 chips 10 4 3,0 82 16 98

Energy crops >5% 30 20 35 briquette 10 5 3,4 103 21 124

Prunnings 2-5% 15 10 45 pellet 10 4 3,4 87 17 105

Wood waste 2-5% 10 10 45 pellet 10 4 3,4 82 16 99

average price €/T 100

8.3 INDICATIVE PRICE PER GCAL READY FOR DELIVERY (FEB. 2015 IN €/GCAL).

Kind of biomass

ash

cont

ent

Final price (€/T)

MWh/T GCAL/T €/Gcal Gas (€/Gcal)

37,2€/Gcal

wheat straw >5% 105 4,0 3,4 30,5 -18%

Reed >5% 98 3,8 3,3 30,1 -19%

Cereals (2nd grade) >5% 106 4,7 4,1 26,0 -30%

Wood logs <2% 59 2,7 2,3 25,6 -31%

Wood chips <2% 66 2,5 2,2 30,5 -18%

Sunflower husks 2-5% 74 5,0 4,3 17,3 -53%

wheat straw >5% 118 4,0 3,4 34,2 -8%

Salix <2% 98 3,5 3,0 32,6 -12%

Energy crops >5% 124 4,0 3,4 36,0 -3%

Prunnings 2-5% 105 4,0 3,4 30,5 -18%

Wood waste 2-5% 99 4,0 3,4 28,7 -23%

100 average 29 -21%

The above price don’t preclude that lower price could be traded and contracted between the parties in a less certified and secured scheme than proposed by the BTC.

Important parameters to monitor are the moisture content and the related low-high heating value, the ash content, the sourcing (and the possible legal or illegal wood cuttings),… all parameters monitored by the sustainability criteria NTA8080.

8.4 WORKING CAPITAL (€/T).

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Kind of biomass Final price (€/T) Working capital (€/T)

% €/T

wheat straw 105 50% 52,5

Reed 98 50% 48,9

Cereals (2nd grade) 106 50% 52,6

Wood logs 59 46% 27,4

Wood chips 66 47% 30,9

Sunflower husks 74 47% 34,9

wheat straw 118 51% 59,6

Salix 98 50% 48,9

Energy crops 124 51% 63,1

Prunnings 105 50% 52,5

Wood waste 99 50% 48,9

100 average (+5%) 50

8.5 DETAILED BUDGET FOR THE TECHNICAL ASSISTANCE: LOCATION, STAFF AMPLITUDE.

The bioheat 100 will be implemented by a staff of 35 people being located in Kiyv, Vinnytsia, Rivne, Hloubik (Sumy Oblast). 4 regions will led the initiative.

All staff members are skilled in bioenergy and each local team will have the duty to disseminate and to replicate locally more initiatives.

Year#1 year#2 Year#3 Year#4

Biomass Trade Centre - expected revenues 190.000 760.000 1.520.000 1.900.000

Quantities under management & certification tons 50.000 200.000 400.000 500.000

Security of storage (tonnage) 15% Regions -7.500 -30.000 -60.000 -75.000

Equivalent Gcal Gcal

160.000 640.000 1.280.000 1.600.000

Certification and management fee - expected revenues 1€ pr Gcal 160.000 640.000 1.280.000 1.600.000

Storage fee: interim and security 4€ per ton 30.000 120.000 240.000 300.000

Biomass Trade Centre - expenditures Staff Location 1.270.000 980.000 790.000 640.000

Management team P&S, implementation and support 4 Kiev 120.000 100.000 80.000 50.000

Expert advice for supply chain development 3 Kiev 80.000 80.000 80.000

Management & devlopment mapping tool 2 Helsinski 75.000 50.000

Reimbursement mapping (MHG Biomass platform)

www. 50.000 50.000 50.000 50.000

Management team P&S 4 Kiev 60.000 80.000 100.000 100.000

Staff for the pooling & sharing platform 2 Kiev 40.000 30.000 30.000 30.000

Legal, fiscal advice (contract, VAT,..) 2 Kiev 40.000 20.000 20.000

Offices supplies, travel, miscellaneous Kiev 30.000 30.000 30.000 30.000

Local branch P&S - Region#1 2 Vinnytsia 20.000 20.000 20.000 20.000

Offices supplies, travel, miscellaneous, security of storage Vinnytsia 15.000 15.000 15.000 15.000

Local branch P&S - Region#2 2 Hloubik 20.000 20.000 20.000 20.000

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Year#1 year#2 Year#3 Year#4

Offices supplies, travel, miscellaneous, security of storage

Hloubik 15.000 15.000 15.000 15.000

Local branch + assistance to energy crops, SRC - Region#3 6 Rivne 75.000 75.000 75.000 75.000

Trial plots energy crops (100Ha)

Rivne 170.000 2.500 2.500 2.500

Offices supplies, travel, miscellaneous, security of storage

Rivne 46.000 19.000 15.000 15.000

Structured financing & microfinance 2 Kiev 80.000 60.000

Structured financing & microfinance 2 Prague 50.000 50.000

Sustainabilit criteria (implementation, audit) 3 Regions 50.000 50.000 70.000 70.000

Offices supplies, travel, miscellaneous for auditors Sust. Audit Regions 10.000 20.000 40.000 40.000

Sustainabilit criteria (implementation, training), foreign experts 2 EU 75.000 75.000 30.000 30.000

Varia: 12,0%

140.000 110.000 90.000 70.000

Margin (EBT) -1.080.000 -220.000 730.000 1.260.000

Taxes 25% 0 0 -182.500 -315.000

Results 36 FTE -1.080.000 -220.000 547.500 945.000

Technical assistance requested year#1+2 & repayment 1.270.000 270.000 -547.500 -945.000

Local expert, manpower & expenditures 605.000 545.000 322.500 70.000

contribution to the technical assistance year#1

48%

EU expert & purchase (license) 320.000 275.000 110.000 80.000

contribution to the technical assistance year#1

25%

Offices supplies, travel, miscellaneous, security of storage 336.000 151.500 167.500 167.500

contribution to the technical assistance year#1 26%

8.6 CONSORTIUM MEMBERS (FEBRUARY 2015)

8.6.1 2ZK - TUZETKA – BEL

Tuzetka (2ZK) supplies equipment and know how to organize supply chain by processing large quantities of biomass such as wood, agro waste and herbaceous biofuels. After processing, the biomass is sold for various bio-based purposes: energy, biopolymers, animal bedding, etc. The production can be exported or used locally.

Tuzetka provides communities and local district authorities with the logistics and technical infrastructure to move away from the use of fossil fuels for their energy needs, initially concentrating on communal district heating.

From 2009 till 2012, 2ZK has operated several activities and project in Ukraine: straw pellet plant in Byla Tserkva, the development of a sustainable supply chain between Ukraine and the Netherlands “(Pellets for Power”). The team members have also advice, design and test the development of supply chain for energy intensive industrialists.

The company is member of AEBIOM and Greenwin, the Walloon catalyst of innovation in environmental technologies, focusing on the three priority domains of green chemistry, sustainable construction and environmental technologies.

Contribution to the project: - sponsor of the “bioheat initiative” (since April 2014) - technical coordination of the project, transfer of know how, - sustainability criteria and certifications scheme (with others partners, suppliers like IFEU and Control Union)

www.2zk.eu - biomass supply chain - ланцюжками поставок біомаси

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Patrick de JAMBLINNE, MD a.i. 2ZK – [email protected] - contact in Benelux +32 478 475 433

8.6.2 BIONERGY ASSOCIATION OF UKRAINE – UABIO - UA

The mission of Bioenergy Association of Ukraine is to create a common platform for cooperation on bioenergy market in Ukraine in order to ensure the most favorable business environment, accelerated and sustainable development of bioenergy sector.

UABIO is organizing the yearly Biomass Conference held in Kiev.

www.uabio.org

Dr. Georgiy GELETUKHA, Head of the Board, [email protected]

Contribution to the project: - supporter of the bioheat initiative since its inception - coordination with the law makers for improve the legal framework for the bioenergy in Ukraine - contribution to define the long range strategy of the BTC - dissemination near the stakeholders

8.6.3 UKRAINE AGRIBUSINESS CLUB – UCAB - UA

The vocation of UCAB is to promote the synergies of common interests of bodies of state power and administration, agribusiness and rural communities aiming at the creation of conditions for sustainable and dynamic development of the sector.

The mission of UCAB is to actively contribute to the creation of an export-oriented, highly efficient and innovative agricultural sector in Ukraine among its 80 members (agroholdings, large farms).

Vision of UCAB: Association “Ukrainian Agribusiness Club” is the largest professional association of Ukrainian agri-food sector, progressive-minded and represented in most regions of the country, offering a wide range of services for agribusiness.

The main priorities in UCAB activities:

To support in communication with the bodies of state power and administration, including involvement into legislation development;

To set up beneficial communication for business (В2В); To provide the full-spectrum services for agricultural, food and resources companies incl.

bioenergy. Contribution to the project: - dissemination to their members of UCAB, promotion of the capacity building to set up locally some more BTC’s - contribution to the strategy of the BTC and the development of economical interest near their members

www.ucab.ua

Аlex LISSITSA - President - [email protected]

Dr. Alla KRAVCHENKO, Deputy Director for International Affairs - [email protected]

8.6.4 RIVNE MARKETING RESEARCH CENTER - UA

www.cmr.rv.ua Rivne Marketing Research Center - an independent organization, established in 1999 to conduct analytical research in the fields of economics, business, environmental protection, development and implementation of regional programs in the sphere of renewable energy, including biomass.

Dr. Taras Mykytyn, Chairman, [email protected]

Contribution to the project:

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- local office for Rivne region of the Biomass Trade Centre - dissemination team for the pooling & sharing facility - establishment of trial plots of Salix in Rivne region (100ha) - team for advice and dissemination for implementing short rotation coppices

8.6.5 VIN PELLET - UA

VIN-PELLET is Number 1 in Ukraine for fuel pellets production from agrobio raw materials. Production capacity is 75 thousand tons of final products annually. Second line construction capacity will be 150 thousands tons per year. Our plans is to build 10 more pelletizing plants in regions of Ukraine.

Contribution to the project: - advice for implementing pellets plants - development and monitoring of supply chain (for pellets and briquettes purposes) - investment in pellets plant

Valeriy Andriyanov – Head of commercial department - [email protected]

8.6.6 MHG SYSTEMS – FIN

MHG Systems Oy is a pioneer in developing the most complete information sharing and communication platform (MHG Biomass Manager) for bioenergy production processes. Our mission at MHG Systems is to bring efficiency gains, cost savings and environmental benefits to all operators in the biomass business value chain, enabling optimization of material and human resources and facilitating operation of more complex business models. MHG Biomass Manager focused on feedstock resource monitoring, managing biomass delivery chains in real-time, enable feedstock assessment, origin tracking and terminal management which lead to environmentally sustainable operations for biomass to energy conversion and optimizing power plant.

Contribution to the project: - supply and implementation of the mapping system, specific development for Ukraine customization - coordination with the BTC and the development office in Mikkeli.

www.mhgsystems.com - informations system for biomass management - Інформаційна система для управління біомаси

Mr Seppo HUURINAINEN, CEO MHG Systems - [email protected]

8.6.7 TRAFICON – UA&CZ

TRAFICON is an independent consulting company providing clients with integrated services for corporate and project Finance, management consulting, financing Energy Projects. TRAFICON offers companies and their shareholders a realistic view of their business and makes independent recommendations for their further development.

TRAFICON is the logical choice for small and medium-sized companies because we believe that they deserve the same professional attention and experience which is traditionally only provided to much larger companies. The company is board member of the European-Ukrainian Energy Agency

Contribution to the project: - coordination of the financing, - support and coordination to implement micro-financing for the local stakeholders - development of the local BTC in Vinnitsya.

8.6.8 INSTITUTE FOR BIOENERGY – BEA - AT

With our solutions we offer customer-oriented production concepts, which are characterized by high efficiency, flexibility and scalability from the laboratory scale to industrial production.

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Our range of services includes: requirements analysis (economic and technical assessment), development of customer-specific production concepts, engineering of pilot plants, support of the realization, including communication with suppliers and start-up.

BEA will provide feasibilities for regions and Investment projects for CHP, heating plants or pellet plants and we will also provide education and training for e.g. stake holders or energy consultants. BEA will be a Gateway between this market and Austrian suppliers (for the beginning).

http://www.bioenergy.co.at/

Contribution to the project: - advice for implementing pellets plants - advice and development, monitoring of supply chain (for pellets and briquettes purposes) for export

Dr. Martin ENGLISCH, Geschäftsführer - [email protected]

8.6.9 UKRBIOENERGY LLC - UA

The “Bioenergy-Vinnitsa Ltd.” is a privately own company established in 2011 and have been developing in Ukraine the project of a network from industrial scale pellets plants for the production of biomass solid fuel. In 2012 Bioenergy –Vinnitsa Ltd. launched the Pilot plant construction and in order to secure feedstock supply started Miscanthus project. Next year the company planted its first commercial plantation of Miscanthus on an area of 200 hectares and started up the first Pilot straw pelletizing plant in Brailiv town. (Vinnitsa area, Ukraine) To date, the “Bioenergy-Vinnitsa Ltd.” factory has produced more than 30,000 tons of fuel pellets from canola, wheat, barley, soybeans straw and became a leading enterprise in Ukrainian straw pelletizing industry.

Our main goal is to scale up our existing business model in Ukraine and to build on its base Vertically Integrated Holding Company, which will focus on converting agro-industrial residues (straw) and energy crop (Miscanthus) to energy and products.

The Holding's tasks are:

1. Biomass feedstock supply for solid biomass fuel production

2. Biomass solid fuel (pellets) production and sales of energy / pellets to municipal heating utilities and to commercial / industrial consumers

3. Installation of modern biomass boilers at municipal heating utilities based on joint programs with urban communities of Ukraine in cooperation with Association of Ukrainian Cities http://www.auc.org.ua/en

Contribution to the project: - advice for implementing straw pellets plants and the related straw mobilization - development and monitoring of supply chain (for pellets and briquettes purposes)

www.ukrbioenergy.com

Sergiy Chabanniy, Founder/Business Development Director – [email protected]

8.6.10 INDRA SCIENTIFIC LTD - UA

Indra Scientific is a technology development company focusing on next generation energy technology systems. We believe that all technological know-how for the development of efficient multi-biomass boilers is present in Ukraine and that a local industry can be developed to manufacture this equipment locally. Contribution to the project: - organization and co-development of multi-biomass boilers industrial supply - coordinating the development of a local equipment manufacturing industry

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www.indra-scientific.com Dr. Volodymyr Krasnoholovets, Managing Director – [email protected]

8.6.11 MARCHENKO DANEVYCH – UA

Marchenko Danevych is a team of lawyers based in Ukraine and dedicated to practice of business law, including commercial, regulatory, transactional and dispute resolution matters. We strive for excellence in legal services and deliver practical solutions to our Clients. We build all our relations based on trust and respect. As lawyers, we contribute to the rule of law, success of our Clients and welfare of society at large.

Marchenko Danevych is also among the legal advisors of the Ukrainian Biomass Association.

Contribution to the project: - legal advices - assistance for contract’s template

www.marchenkodanevych.com

Borys Danevych - Managing partner, Attorney-at-law - [email protected]

8.7 BIOENERGY POTENTIAL, IN FIGURES

The bioenergy potential in Ukraine is estimated to be about 25-30 mill tons of coal equivalent/year and corresponds up to 16% of the primary energy consumption of Ukraine. Biomass covered already 2,2 mill tons of coal equivalent in energy balance of Ukraine in 2012. The feasible targets for bioenergy in Ukraine can be assessed as follows. – Source UA Bio – www.uabio.org

Year 2011 2015 2020 2025 2030

Share of biomass in gross final energy consumption

1,78% 2,2% 4,3% 7,2% 10%

Share of biomass in thermal energy generation

6% 8% 14% 22% 32%

Share of biomass in electric energy generation

0,01% 0,2% 1% 2,2% 4,0%

The implementation of the proposed bioenergy strategy in Ukraine could replace 3,5 billion m³ of natural gas by 2020 and 7,5 billion m³ by 2030. For each billion m³ of natural gas replaced, an annual saving of about 150 millions $ in subsidies for the state budget can be expected. – source UA Bio - www.uabio.org

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These targets fulfill perfectly the Ukrainian obligations in regards of the Energy Treaty to reach 11% of renewable energy compared to the total energy consumption by 2020, and will probably anticipate (potential) requests from the IMF.

8.8 LETTERS OF SUPPORT.

More than a doze of letters of support or positive opinions were collected during the preparation of the project. This project is backed up by local players and experts to achieve successful and budget wise results.

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НАЦІОНАЛЬНА АКАДЕМІЯ АГРАРНИХ НАУК УКРАЇНИ

ІНСТИТУТ БІОЕНЕРГЕТИЧНИХ

КУЛЬТУР І ЦУКРОВИХ БУРЯКІВ

03141, м. Київ, вул. Клінічна, 25.

Телефон (044) 275-50-00. Факс (044) 275-53-66

E-mail: [email protected] http://www.sugarbeet.gov.ua

NATIONAL ACADEMY AGRICULTURAL SCIENCES OF UKRAINE

INSTITUTE

OF BIOENERGY CROPS AND SUGAR BEET

03141, Kyiv, str. Klinichna, 25.

Phone (044) 275-50-00. Fax (044) 275-53-66

E-mail: [email protected] http://www.sugarbeet.gov.ua

___________________________________________________________________________________________________________

Code EDRPOU 00489780. Settlement account 35216001006085, Main State Treasury Service of Ukraine in Kyiv, Sort Code 820019, Individual Tax Number 004897826587, Certificate 200004117

Kyiv, 10 February 2015 To whom it may concern.

Object: Bioheat 100 Initiative

Dear Mr de Jamblinne,

The Institute of Bioenergy Crops and Sugar Beet NAAS of Ukraine (Kyiv,

Klinichna St. 25) has been leading the NAAS Research Program No. 22 "Bioenergy

resources" in 2010-2015. This program will be continued in 2016-2020. We are ready to

cooperate with organisations and initiative like Bioheat 100 for the development and

implementation of projects in different soil-climatic zones. We possess land resources of

30,000 hectares. Partly this land is currently being used as nursery gardens for energy

crops, such as miscanthus, energy willow, switchgrass, sugar sorghum etc., which can be

used for production of biofuels, with their area increasing every year.

Mykola Royik

Director

Contact persons:

Mykhailo Gumentyk, Tel.: +38 096 545 64 53, e-mail: [email protected].

Ievgeniia Morozova, Tel.: +38 096 683 83 22, e-mail: [email protected].

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U krainianAgribusinf!ssCI u b

NQ 94/17.02.2015

To whom it may concern

Object: project Bioheat 100 in Ukraine

Dear Mr. de Jamblinne,

Association "Ukrainian Agribusiness Club" 3 f loor, 146 Zhyl ianska Str. 01032 Kyiv, Ukraine Phone/Fax: + J80 44 2362097/79 [email protected] www.ucab.ua

Association "Ukrainian Agribusiness Club" (UCAB) has reviewed the project Bioheat 100 and

confirms its willingness to parti,~ipate at the project. As a consortium member, UCAB represents over 80 important representatives of the industry - they cultivate more than 4.6 million hectares of farmland, making up 23% of the total lands cultivated by agricultural enterprises; grow 15.9% of cereal:;, 14.2% of oilseeds and 27. 1% of sugar beets of the total

production of these crops by agricultural enterprises in Ukraine. They keep 35.9% of all

livestock raised in Ukraine. The share of agricultural products, produced by UCAB members, in GDP ofUkrainian agriculture amounts to 15% (list ofUCAB members is enclosed) .

UCAB is ready to contribute into the project through dissemination to our members, promotion of the capacity building to set up locally some more BTC's; contribution to the strategy of the BTC and the development of economic interest for UCAB members.

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Members of UCAB:

1. Milkiland Ukraine

2. Ramburs

3. Industrial Milk Company

4. Agrofusion

5. Agrosolutions

6. Melitopolska Chereshnya

7. Kiev International Contract Fair

8. Zelena Dolyna

9. KWS Ukraine

10. Kozyatinskiy Mjasokombinat

11. Chista Granitza

12. Corporation Agrosoyuz

13. John Deere Ukraine

14. Corporation Svarog West Group

15. New Holland Ukraine

16. CASE

17. Kuhn Ukraine

18. Claas Ukraine

19. Monsanto Ukraine

20. Kernel

21. Mriya Holding

22. Mironovskyi Chleboprodukt

23. Grain Technologies

24. Ukrainian Agrarian Investments

25. AgroGeneration (Harmelia)

26. HarvEast Holding

27. Agrain

28. Group of Companies Agrotrade

29. Danone Ukraine

30. TUV Rheinland Ukraine

31. Lemken Ukraine

32. Presence Technologies

33. Syngenta

34. BASF

35. BayerCropScience

36. NCH Advisors

37. Agro-Region

38. AGCO Ukraine

39. Lampka Agro

40. Hyadt Agro

41. Agro-Consult

42. Maschio Gaspardo Ukraine

43. Agrimatko Ukraine

44. DuPont Ukraine

45. Crédit Agricole Bank

46. UkrSibbank

47. AMARANT

48. Cygnet Holding

49. Agrocultura Zahid

50. Vinnytsia agro-industrial group

51. PhosAgro Ukraine

52. TerraVita Ukraine

53. Service – Agrocenter

54. Ukrainian agro-chemical company

55. AgroRos

56. SPE firm "Eridon"

57. Bizon-Tech 2006

58. Shchedry Lan

59. Agrozakhyst Donbas

60. Great Plains Ukraine

61. August-Ukraine

62. Agroscop International

63. Horsch Ukraine

64. Alfa-Bank

65. NPZ-Lembke

66. Lyustdorf

67. JSC Kremenchuk dairy plant

68. Ichnya Milk Powder and Butter Plant PJSC

69. Maisadour Semences Ukraine

70. CropLife International

71. Continental Farmers Group PLC

72. Agroswit

73. Raiffeisen Bank Aval

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FAFCO SA – Johann Renfer Strasse 4-6 – CH-2504 Bienne – tel +41 32 342 33 52 – www.fafco.ch

Bienne, the 19. of February 2015

Concerns : BioHeat 100

Mr de Jamblinne, dear Patrick,

We have read the draft for the project Bioheat 100. The purpose is to

warranty a sustainable supply chain for heat production.

FAFCO is a Swiss company specialized in heat storage, ice storage and

thermal solar energy. The FAFCO unglazed solar collector is an example of the finest Swiss technology. Manufactured from a specially developed,

highly stabilized polyolefin material, it has a parallel circular channel design. It is unglazed, un-insulated and used for space heating in public

buildings, hotels, and water heating for pools, hospitals, or aquaculture for instance. Our products carry worldwide patents. We are interested to follow your project for improving the heat management, the base and peak-load of the heat production with a

significant increase of the energy efficiency. We could contribute to the workshop organized in Ukraine and to

exchange of know-how. We wish you good luck into the bioheat venture.

Best regards,

Guillaume Bourtourault

CEO FAFCO SA

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Etienne Bertier Président-­‐administrateur délégué

Bois et Biomasse SA RCS Luxembourg B 172988

To M. Patrick de Jamblinne

Objet : projet Bioheat 100

Uccle, February 20th 2015 To whom it may concern Mr de Jamblinne, Wood and Biomass is a private company which has developed four years ago biomass plantations project in Ukraine. Bioprojekt, the local subsidiary managed by by Mr. Gérard de la Salle is active North of Lviv and in Berdichev (Zhytomir oblast). To date, nearly 400 ha of willow (two varieties of short rotation coppices) and poplar (three varieties) were established. In the short term will be able to Bioprojekt produce 4.000 tonnes of dry matter per year. Furthermore Bioprojekt is producing yearly 2 million willow cuttings and poplar allowing the expansion of 250 to 300 hectares of SRC each year. By this letter, we are considering your project Bioheat 100. We are interested to follow any initiative to structure the biomass supply chain for bioenergy purposes. Standardization of biomass qualities, price transparency, tax, logistics and environmental aspects are the requirements to foster the security of supply for district heating and bionergy and, by achieving this, a long lasting energy independence in Ukraine. Please keep us informed about the intention of the donor's. Thank you for your efforts. Best regards,

Etienne Bertier

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23.2.2015 © MHG Systems

MHG SYSTEMS 1 / 1

MHG Systems Oy Ltd Mikpoli, Patteristonkatu 2 FI-50100 Mikkeli, Finland

Tel. +358 (0)10 400 6280 [email protected] www.mhgsystems.com

Business ID: 1962609-7

Concerns : BioHeat 100 Mr. Patrick de Jamblinne Dear Patrick, We have read the draft for the project Bioheat 100. The purpose is to organize and manage a certified, sustainable supply chain for heat production. MHG Systems Oy is a Finnish company, pioneer in developing the most complete information sharing and communication platform (MHG Biomass Manager) for bioenergy production processes. Our mission at MHG Systems is to bring efficiency gains, cost savings and environmental benefits to all operators in the biomass business value chain, enabling optimization of material and human resources and facilitating operation of more complex business models. MHG Biomass Manager focused on feedstock resource monitoring, managing biomass delivery chains in real-time, enable feedstock assessment, origin tracking and terminal management which lead to environmentally sustainable operations for biomass to energy conversion and optimizing power plant. We are interested to participate as an IT- service provider and consultant in your project BioHeat 100 customizing our current cloud services and mobile apps for Ukrainian business environment. We wish you best luck into this bioheat venture! Kind regards,

Seppo Huurinainen CEO MHG Systems Oy

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Scientific Engineering Centre «BIOMASS»

P/o Box 66, Kyiv - 67, 03067, Ukraine Tel./Fax: +380 44 456 9462; 453 2856

[email protected] www.biomass.kiev.ua

Kyiv, February 24th, 2015

To whom it may concern

Object: Bioheat 100 Initiative

Dear Mr. de Jamblinne,

Scientific Engineering Centre "Biomass" Ltd. (SECB) is a consulting and engineering company established in January 1998. At present we are the leading commercial Ukrainian company in the field of energy generation from biomass (wood, straw, manure, municipal solid waste and other organic waste), energy efficiency, energy audits, design of energy facilities, and development of JI projects under Kyoto Protocol.

SEC “Biomass” expresses its readiness and willingness to cooperate under “Bioheat 100” project through providing consultancy services, including assessment of biomass potential, analysis of legislation, performance of feasibility studies etc., as well as dissemination of information to stakeholders in Ukraine.

Sincerely yours,

Geletukha Georgiy,

Director, SEC “Biomass”

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I%б-*й

вул. Вшшн ева, 24, м. Вiннпця, 2L037, телJ факс (0432) 680-б30

р/р 2600900100б582 в IШТ *Радикал БанкО' МФО З19111.

Код €ДРIIОУ 33б49363, iщ. под. Еомер 3364936В2289E-mail : viй[email protected]

,, Ыl . (z_ю/1?(2rа/

20l5p. Nч,Jлl/ГrНа Ns вiд

patrick de Jamblinne

Managing Director 2ZK (Tuzetka)

BioHeat 100 - Сопsоrtiцm

шановний пане patrick de Jamblinne!

.0,якую Вам за звернення та запропоновану презентацiю проекry локального га3ового замiщення на ocHoBi

втiлення механiзму використання бiологiчного (деревина паливна Tpicka) джерела енергii мiсцевого походження.

так, проблема замiщення споживання росiйського газу альтернативними джерелами енергiт, € актуальною

проблемою сьогодення ByKpaiHi. Сектор комунальноiта приватноiтеплоенергетики дерЖави потребУе

кардинальноi модернiзацiТ об'ектiв генерацii тепловоi енергii з дооснащенням твердопалиВними котламИ 3

використанням мiсцевих твердих альтернативних джерел енергiТ бiологiчного походЖення.

Перевага Вашого проекту проти традицiйноТ переробки лiсовоТ сировини , базуеться на комплексi заходiв по

вирощуванню бiльшого об'емудеревини для виробництва паливноТтрiски на одиницю площi.,Щруга позицiя, яка

ма€ ознаки переваги проекry, це iснування у виробника спецiального парку технiки для забезпечення логiстичних

процесiВ заготiвлi, переробкИ та транспорТування, що е ефективним у роботi об'ектiв генерацii у частинi

постачання палива. Третя, icToTHa перевага, - це залучення приватних фермерських господарств мя можливого

наданняудовгостроковуорендуземельнихдiлянокпiденергетичнiкульryри,та можливiстьнадання послугу

доглядi та збiрУ цих кульryр. Така спiвпраця консолiдУ€ напрацювання cTopiH у використаннi сучасних технологiй

у альтернативнiй енергетицi та аграрного секторy вiдповiдного напрямку, на партнерськiй ocHoBi.

Втiлення зазначеного проекry на теренах ВiнницькоТ областi , е iстотною допомогою у 3аходах по замiщенню

використання традицiйного палива, а саме росiйського газу, на альтернативне деревинне паливо та 3меншить

фiнансове навантаження на бюджетнi установи якi використовують i залежать вiд сумлiнного

постачальника таких послуг.

flиректор з виробниI4тва

та розвитку iнфраструктури 4

КОМУНАЛЬНЕ ПIftВIННИЦЯОБЛТЕ

дпри€мствоплоЕнЕрго,

ý:г

#:,-ý'#lаеl"пшфiСf KoiЁ sзs;s:6з

lфч* *uJ

lrор Луценко

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WOOD TO OIL

Nettenergy BV

Burg. Colijnstraat 81, 2771GH, Boskoop, The Netherlands

Tel: +31-172-232223 – www.nettenergy.com – [email protected]

To whom it may concern Reference: Bioheat 100

Dear Mr. De Jamblinne,

I've reviewed your Bioheat 100 Initiative. Nettenergy is interested to license its technology to this initiative.

Nettenergy produces renewable energy and material on the basis of plant

biomass using its innovative 2nd generation flash pyrolysis technology: PyroFlash

With this technology we simultaneously produce:

- High quality pyrolysis oil (3% water content, HHV 24 MJ/kg) - Charcoal and Electricity

The pyrolysis oil is a valuable renewable liquid fuel. The charcoal is an

excellent soil improver what will contribute to the sustainability of the supply chain.

Nettenergy focuses on local markets in which the raw material (wood,

grass, crop residues) for the pyrolysis process are already present.

Nettenergy enables owners of this resource (municipalities, forest managers,

farmers) to generate electricity and heat.

Nettenergy uses a unique concept: the mobile pyrolysis plant.

We are ready to discuss the license of our technology with Ukrainian

partners.

Thank you to keep Nettenergy informed about the outcomes of your initiative

Best Regards,

Rob Vasbinder General Director

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GESS Consulting Ukraine, LLC T: +38 044 364 00 19 20 Esplanadna Str., office 1102 M: +38 066 721 28 95 01023 Kyiv, Ukraine E: [email protected]

February 24, 2015 Mr de Jamblinne, We have analyzed your document "DRAFT Bioheat 100" for establishing assistance to a sustainable supply chain. GESS Consulting Ukraine has pioneered a green energy investment model tailored to the emerging Ukraine energy utilities market. GESS CONSULTING UKRAINE has multiple projects now under contract and in development. GESS CONSULTING UKRAINE is the recognized leader in the sustainable modernization of Ukraine's heat and power utilities sector. GESS CONSULTING UKRAINE's green energy asset portfolio features Combined Heat and Power (CHP) plants fueled with renewable agricultural waste. As you mention it in your draft, Ukraine enjoys a thriving and prolific agro-processing sector that can supply reliable, domestic bio-fuel source for the country's growing fleet of biomass-fueled heating and power generation plants. It's indeed important for our investments as well as others investment to rely on a long term perspective and secured supply chain with respect to the sustainable criteria. You can count on our support. We would like to be informed about the outcomes of your initiative being funded by donor's, development agencies or investors. Thank you in advance for your efforts, Shaun Lee Director of Field Operations GESS Consulting Ukraine

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2/25/2015 Gmail - Bioheat - letter of support

https://mail.google.com/mail/u/0/?ui=2&ik=d1297f9e72&view=pt&search=inbox&msg=14bbfdedcb32360f&siml=14bbfdedcb32360f 1/2

Patrick de Jamblinne <[email protected]>

Bioheat ­ letter of support

Lesya Matiyuk <[email protected]> 25 février 2015 09:33À : Patrick de Jamblinne <[email protected]>

Dear Patrick,

Thanks a lot for the documents and the introduction of your project idea.

As you know, the Agency for Renewable Resources /FNR e.V. is a state agency working for the FederalMinistry of Food and Agriculture.

In Ukraine, we are currently active within our BIO‐PROM project which is financed by the FederalMinistry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) in theframework of the International Climate Initiative (ICI). The project has started on 1 April 2013 and hasduration of three years.

Within our project we are supporting investment projects aiming to establish sustainable production andutilisation of biofuels in Ukraine. Please, consult the profiles of the projects that we are currentlysupporting on our website.

We are also following further bioenergy initiatives in Ukraine both on national and international levels.Your project idea falls exactly into the focus of this activity.

Concerning the letter of support, I have just received the feedback from our managing director: As a stateagency we, unfortunately, cannot provide you with the letter of support at this early stage of the projectdevelopment.

However, we will be glad to stay in touch with you and discuss possible synergy effects that might beidentified in the upcoming meetings with your current project partners. Please, do inform us about thestate of your project development.

Best regards

Lesya Matiyuk

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2/25/2015 Gmail - Bioheat - letter of support

https://mail.google.com/mail/u/0/?ui=2&ik=d1297f9e72&view=pt&search=inbox&msg=14bbfdedcb32360f&siml=14bbfdedcb32360f 2/2

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ Fachagentur Nachwachsende Rohstoffe e.V. (FNR) Dr Lesya MatiyukEU and International CooperationOT GülzowHofplatz 1 18276 Gülzow­Prüzen

Germany

Tel.: +49 (0)3843/6930­158 Fax: +49 (0)3843/6930­220 Mail: [email protected]­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ Web: www.fnr.de; www.nachwachsende­rohstoffe.de ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ Fachagentur Nachwachsende Rohstoffe e.V. (FNR) – Managing Director: Dr.­Ing. Andreas Schütte ­Board: Wolfgang Vogel (president), Alois Gerig, Clemens Neumann, Karsten Pellnitz, Dr. Jörg Rothermel,Georg Schirmbeck – registered at Amtsgericht Güstrow – reg. no. VR 281

Von: [email protected] [mailto:[email protected]] Im Auftrag von Patrick de JamblinneGesendet: Dienstag, 24. Februar 2015 19:41An: Lesya MatiyukBetreff: Fwd: Bioheat ­ letter of support

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2/25/2015 Gmail - RE: Contact

https://mail.google.com/mail/u/0/?ui=2&ik=d1297f9e72&view=pt&search=inbox&msg=14bc00eb813d35b2&siml=14bc00eb813d35b2 1/1

Patrick de Jamblinne <[email protected]>

RE: Contact

Harmen Willemse <[email protected]> 25 février 2015 10:25À : Patrick de Jamblinne <[email protected]>Cc : Jarno Dakhorst <[email protected]>

Dear Patrick,

Thank you for sending the project plan. I can see that a lot of work has been done to set this up. I amhappy to see hat the NTA 8080 sustainability criteria are adopted in your approach. Please keep me up todate and let me know if there is any way within our capabilities to support the project.

Kind regards,

Harmen Willemse

NTA 8080 | Sustainable biomass

Vlinderweg 6 | P.O. Box 5059 | 2600 GB Delft

T +31 15 2 690 295 | M +31 6 3333 4669 | F +31 15 2 690 207

E [email protected] | I www.NTA8080.org

From: [email protected] [mailto:[email protected]] On Behalf Of Patrick de JamblinneSent: woensdag 25 februari 2015 9:30To: Harmen WillemseSubject: Re: Contact

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