Replacing outdated heating supply saves the milk plant millions
Kalinkovichi Milk Plant, one of the largest in Belarus since 1975, produces over 60 types of dairy products processing 460 tons of milk per day. The main product – condensed milk – is 100% exported, comprising half of the company’s export.
The plant addressed BelSEFF for financing of a small co-generation plant with a boiler unit, which will replace the former heat supply from the grid and the old municipal boiler house built in 1978.
The new CHP will deliver significant cost savings by providing more efficient heating and replacing most of the electricity from the grid. Own generated electricity will be complemented by electricity from the grid only during peak consumption hours.
The BelSEFF team provided advisory services to the company by performing an independent analysis of the proposed technology, its financial and technical parameters and risks.
The $2.93 million investment, where the BelSEFF loan comprised $1.67 million, generated energy savings of $2.94 million per year, demonstrating outstanding profitability and fast repayment from energy savings only.
The project is special in the way that it is implemented under a novel BOOT approach (build–own–operate–transfer), where the milk plant receives a turn-key solution devoid of the project risks. It is the project developer – the foreign Torsti Ltd. company – who takes the commitment, the loan, the risks and implements the project, possessing the needed expertise. Upon the final payment from the milk plant, the equipment will become its property, delivering savings for the years to come.
The project is a great example of multi-stakeholder cooperation and shared responsibility, leading to joint and fruitful results, which would otherwise not happen. In addition, it shows how a company can have both a sustainable business, as well as deliver a positive environmental impact for the benefit of all.
This project was supported by Czech Republic.