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We propose for your consideration the description of project "STUDY ON COMPLEX BIOMASS TREATMENT IN COMMON BORDER REGION HU-SK-UA (study on feasibility)" financed by the European Commission in the framework of INTERREG IIIA Neighbourhood Programme Hungary - Slovakia - Ukraine 2004-2006.

The present project is jointly implemented by the partners of three border countries, such as Ukraine, Slovakia and Hungary.

From the Slovak part the project is implemented by REVIC n.o. - non-profit organization "REGIONAL EDUCATION AND INFORMATION CENTRE", Presov - that acts as a Lead Project Partner and represents the interests of Presov and Kosice self-governing regions (the east of Slovakia).

From the Hungarian part the project is implemented by Zempplen development association foundation that represents Borsod-Abauj-Zemplen and Szabolc-Szatmar-Bereg regions (the north-east of Hungary).

From the Ukrainian part the project is implemented by the Agency of Regional Development and Cross-Border Co-operation "Transcarpathia" that represents Zakarpatska oblast (the west of Ukraine).

The project is implemented on the target territory represented by Zakarpatska oblast (Ukraine), Presov and Kosice self-governing regions (Slovakia) as well as by Borsod-Abauj-Zemplen and Szabolc-Szatmar-Bereg regions (Hungary). On the territory of Ukraine the project is being implemented since July 2006. The duration of the project is 24 months that are can be conditionally divided into 5 working blocks. Each block ends with summarizing the interim results through running the information and practical seminars. The project costs amount to 157 760 EURO. The grant of the European Commission amounts to 141 084 EURO. The own contribution from Ukrainian side makes up 15 676 EURO.

The present project is aimed at carrying out the complex study of possibilities of nonconventional and renewable power sources development, i.e.:

• biomass in Zakarpatska oblast and cross-border target region;
• development and implementation of the joint Conception on biomass treatment in border region Hungary - Slovakia - Ukraine.

The work on the Conception can be conventionally divided into two stages: - development of the Conception for each target region of the project; and - combining the main priorities of these Conceptions into one joint cross-border Conception on biomass treatment.

The word "Conception" is derived from Latin "conceptio" that means "understanding, complete design and basic idea". The conception is a system of points of view that represents certain mode of sought ("point of view"), understanding and interpreting of certain phenomena and processes as well as presentation of the basic idea or (and) constructive principle.

In the framework of the present project term STUDY ON FEASIBILITY is being used. It means a necessary study that precedes the carrying out of investment activity. Within the study the complex of works on studying and analyzing all the necessary parameters of the object of study and development of the detailed plan-scheme of efficient introduction of one or another technology were carried out.

The Conception contains the following parts:

1. General part
2. Technical part
3. Financial and economic part
4. Final part

1. General part

1.1. Social and economic description;

• Basic elements of social and economic description
• Institutional and political aspects

1.2. Supply and demand for project results

• Forecasted potential demand
• Competition
• Proposed strategy
• Approximate number (percentage rate) of potential use

2. Technical part

2.1 Technological alternatives and production plan;

• Description of the main technological alternatives
• Selection of proper technology
• Buildings and businesses
• Initiation of production
• Personal proposals
• Energy needs
• Producers of technologies
• Investment costs
• Production plan after the project implementation
• Combined proposal of conclusions
• Organization of production

2.2 Human resources;

• Diagram of organizations
• List of characteristics of personnel and payments
• External services
• Approach to the personnel searching
• Approach to the personnel studying
• Annual personnel costs (before and after project initiation)

2.3 Localization;

• Ideal conditions for location
• Alternative opportunities
• Choosing the place and its characteristics
• land and territory preparation costs
• Accessibility of the territory
• Requirements for the infrastructure

2.4 Implementation;

• Analysis of construction/commission (project cycle)
• Column diagram (or PERT table) of main phases of implementation
• Basic information on time characteristics of implementation that should be taken into account in financial report

3. Financial and economic part

3.1 Financial analysis

• Basic indices of financial analysis
• Fixed investment costs
• Costs before production
• Circulating capital
• Gross investment
• Operating incomes and costs
• Funding sources
• Financial plan
• Balance sheet
• Sheet of incomes and costs
• Determination of net cash flow
• Net gross revenue / internal margin of profit

3.2. Analysis of social and economic costs and incomes

• Bookkeeping indices
• Analysis of social costs
• Analysis of social incomes
• Economic index of payback and net gross income of the project within monetary conditions
• Other evaluation criteria

3.3. Risks analysis

• Limitation of critical variables that serve for analysis of sensitiveness
• Modelling the best and the worst action scenario
• Analysis of probabilities

4. Final part

• Summarizing the project results in Zakarpatska oblast as well as in cross-border region (Hungary-Slovakia-Ukraine);
• Recommendations and characteristics of advisability of biomass use on the territory of Zakarpatska oblast.

As a result of collection of analytical and statistical information covering Zakarpatska oblast the main working priority spheres of biomass use in view of its origin are chosen at the present time. They are as follows:

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• Forestry (biomass of forest origin);
• Agriculture (biomass of agricultural origin)

The target groups of the project are: population of the target territory of the project, regional and local authorities, environmental organizations, economic entities, potential investors as well as scientific and educational institutions.

The work in the framework of the project can be conditionally divided into five blocks of activities

1. The first block of activities

• creating the proper work conditions for project team and experts;
• adhering to the necessary legal requirements of the Law of Ukraine on activity envisaged in the framework of the project (project registration, concluding of the relevant agreements etc);
• presenting the project and cross-border partners to local publicity of Zakarpatska oblast during the Initial Conference of the project;
• starting-up collecting and processing the analytic data necessary to develop the Conception of biomass treatment in the target region;
• holding the first information and practical seminar of the project.

The first block of activities will be finalized by reviewing and summarizing materials and results of the study on the territory of Ukraine.

In its framework there will be also:

• agreed common methods of the Conception development,
• determined problems-priorities of the target region in the sphere of biomass treatment
• initiated the work on the second part of the Conception.

2. The second block of activities envisages carrying out the following actions:

• additional data collecting in view of determined priorities;
• preparing the Technical part of the Conception of biomass treatment in Zakarpatska oblast;
• holding the seminar on results of the second block of activities.

3. The third block of activities envisages:

• preparing the Financial and Economic part of the Conception;
• discussing the current project achievements with representatives of target groups;
• analyzing, studying and processing the remarks of target groups' representatives;
• summarizing the results of work with target groups as well as presenting the results of co-operation at the third information and practical project seminar.

4. The fourth block of activities envisages:

• preparing the Final part of the Conception of biomass treatment taking into account all remarks and proposals that were preliminary expressed;
• finalising elaboration of General part, preparing and presenting the draft Conception as well as discussing its weaknesses with the publicity;
• developing and presenting the project of final version of the Conception in the cause of the fourth information and practical project seminar.

5. The fifth block of activities envisages:

• promoting the Conception of biomass treatment developed in the cause of the project at regional and national levels as well as drawing up and signing the multilateral agreement on cooperation among organizations involved into implementation of the Conception on renewable energy sources' treatment
• publishing all the results of studies carried out during the project implementation as well as presenting the recommendations on biomass treatment in Zakarpatska oblast.

Project state of affairs

• the proper work conditions for project team and experts of the working groups are created;
• all the necessary actions about adhering to the necessary legal requirements of the Law of Ukraine on activity envisaged in the framework of the project are taken;
• common methods of the Conception development are agreed as well as problems-priorities of Zakarpatska oblast are determined;
• working groups of experts that will be engaged into development of the Conception of Zakarpatska oblast are being formed.
• collecting and processing the analytic and statistical data necessary to develop the Conception of biomass treatment in the target region is initiated;
• the work with the authorities covering profile departments and departments of oblast and district levels is initiated;
• the work with scientific and research institutions of Zakarpattya and Ukraine is initiated;
• the work with Ukrainian and foreign organizations that are interested in the joint work on development and implementation of the Conception is being carried out;
• consultations and meetings with partner organizations aimed at agreed work on cross-border co-operation are being held.

Project successful implementation will contribute to:

• lowering the emission weight on environment by making use of renewable energy resources;
• increasing the generation of additional energy recourses per capita due to renewable energy sources treatment;
• forming the positive public opinion on possibilities of renewable energy sources treatment;
• enforcing the cross-border cooperation in biomass usage;
• improving the cross-border co-ordination of the environment and natural resources protection;
• increasing the level of public awareness of renewable energy sources as well as of popularization of economic usage of the above mentioned energy source;
• creating the basic background for possible investments in the region;
• enforcing the sustainable development of the areas that are economically and energetically sensitive.

The Project Initial Conference was being held on November 15-16, 2006 in Uzhhorod (conference-hall, hotel "Druzhba"). The target group covered representatives of public of Zakarpatska oblast, authorities, scientific-research and educational institutions, non-profit and non-governmental organizations as well as of the business.

In the framework of the Initial Conference the population of Zakarpatska oblast was informed on the project and its main goals.

Among the aims of the team of ARD "Transcarpathia" are the following results that were being planned to be achieved in the cause of the Initial Conference:

• to determine and approve priorities of the Conception.
• to agree on the structure of the Conception, amendments and specifications.
• to determine participants of the Working Group.

Results of the Initial Conference:

1. In the cause of discussion with participants of the Initial Conference the activity priorities were being discussed. The participants expressed their opinions and stressed the importance of such priority as forestry that is conditioned by the particular feature of Zakarpattya, as well as of additional priority - agriculture for the Conception. The proposals on studying the opportunity of household waste use as an alternative energy source in Zakarpattya were also submitted
2. The directions of the use of received from biomass energy, i.e. Zakarpattya demand for additional energy, issues of energy transportation, its consumption, needs of population and companies and so on, were discussed.
3. The following issues were proposed:
   • to consider problems of agricultural lands use with the purpose of biomass growing, i.e. land sharing and a big quantity of small plots of agricultural purpose in private property;
   • In the process of Conception development to take into consideration the newest technologies and equipment on biomass processing of different capacity and origin, especially, of Ukrainian, Slovak and Hungarian one;
   • To calculate the efficiency of biomass use as a source of energy and make a comparison with other (the most important for Zakarpattya) alternative energy sources, that is: small hydro-electric engineering and use of geothermal waters;
   • To conduct discussions in the form of round tables;
   • To take into account the environmental norms and standards related to biomass use as a source of thermal energy obtained as a result of its burning in the boilers
4. In the cause of discussion the end use of the Conception (what needs the Conception is directed to meet and who will benefit from it) was discussed.
5. To evaluate the possibilities of biogas use in the Conception if it is proved that sufficient raw materials base is available.
6. In the process of the Conception development to take into consideration the world tendencies and their influence on energy markets of Ukraine as well as determine the possibilities of fluctuations of supply and demand indicators as well as price rising for main fuel types.
7. To present information on project progress, i.e. on activities and phases of project implementation by the team of ARD "Transcarpathia" and its foreign partners to the public of the oblast.

On November 24, 2006 the team of ARD "Transcarpathia" ran the meeting on the results of the Initial Conference. The meeting was aimed at determining the next steps of project implementation. The task was to discuss participants' proposals, summarize the results of the Initial Conference, design a plan of further actions as well as discuss the structure of Conception and possibilities of its amendment.

Managers, project assistants and invited project experts have taken part in the meeting.