Heating of the urban area of Teslic – decentralized biomass-fired boiler plants


Energy sector


Central area of Teslic municipality


There is no organized system of heat energy supply in the territory of Teslic municipality, and buildings are heated by individual heating systems in each building. Therefore, a preliminary study was prepared in order to define the needs of the town of Teslic for heat energy, propose technically and economically feasible solutions, bearing in mind the available energy resources in the territory of the municipality and its vicinity. The preliminary study covered only the central part of the urban area of Teslic. Economic analysis considered four possible technical solutions for heating of the central urban area of Teslic. The fourth variant – decentralized pellet-fired boiler plants, proved to be the optimum technical and technological solution.

The implementation of this project implies conducting the following groups of activities:

  1. Select the variant solution for heating of the central urban part of Teslic (this activity is completed);
  2. Prepare project technical documents;
  3. Provide funding;
  4. Establish operational and institutional structures for heating system management;
  5. Perform the works on heating of the central urban part of Teslic in the first phase;
  6. Perform the works on heating of the central urban part of Teslic in the second phase;
  7. Test and commission the heating system.

5.1 What type of project is it

This is a greenfield project that can be implemented in two ways:

  1. as an investment by the interested investor in full (100% ownership) or
  2. as a joint venture between the investor and local administration.

In the second case, the municipality would have a share in the project through land for plants and installations, permits, project documents etc. The share in ownership would be a matter of agreement between the two parties.

5.2 Project status

Currently, a pre-feasibility study of heating of the urban part of Teslic municipality has been prepared. The preliminary study was prepared in November 2015. It was completed within the International Development Cooperation of the Czech Republic and funded by the Czech Development Agency funds. The document proposed variant solutions for project implementation and estimated costs of each of the variants.

5.3 Reasons to invest in the project

Since there is no centralized heating system in the urban area of Teslic, the potential investor would have no competition in heat energy supply sector and that represents a significant factor which affects the commercial interest of the investor. The territory of the town of Teslic is inhabited by about 10,000 people in more than 200 collective residential buildings suitable for a centralized heating system. The General Plan of the town is such that it is favorable for heating projects (due to relatively short energy supply lines). Besides, biomass-pellet etc. supply systems exist in the close vicinity and can affect the economy of the investment. There are several pellet suppliers in Teslic.


6.1 Estimated project value in €

Estimated project value is about 5,000,000 euro (10,000,000 BAM).

6.2 Planned sources of financing

The project could be financed as a completely private investment or as a joint venture between the investor and the municipal administration.

6.3 Inputs by local partner

The potential investor can expect local administration support in the process of obtaining necessary permits for investment implementation, provided plant location and linking the investor with suppliers. Also, the municipality can assist in finding labor.

6.4 Inputs by investor

The investor is expected to use own funds to enable project implementation through a phased expansion of the heating system or implementation in one step (in case the municipality does not participate in the new company). The investor is expected to choose an environmentally acceptable solution. Also, the selected heating system is expected to allow consumer price in line with the average market prices (the investor is expected to allow local government to influence the setting of heating price).

7. Has physical location for project implementation been identified

The design identified locations for project implementation. The zone of coverage was defined together with the town administration of Teslic and implied the central urban area, as well as buildings along the Sv. Sava Street. Family houses are not covered. The following public buildings are covered: public administration buildings, schools,
kindergartens, sports facilities and Health Clinic building. An appendix to the preliminary study includes a table showing all covered buildings and a map showing building positions.

8. Have the activities on project implementation already started

Yes, currently, a pre-feasibility study of heating of the central urban part of Teslic municipality has been prepared.

9. Project applicant and contact information

Address: Karadjordjeva no.18
Phone: +387 53 411-500
Fax: +387 53 411-541
E-mail: nacelnikopstine@opstinateslic.com