A new biogas station in Tištín generates annually at least 4,220 MWh and 4,481 MWh of electrical and thermal energy, respectively, by processing farm produce and wastes. The owner of the station, Agrodružstvo Tištín, will use the biological waste produced in biogas generation as high-quality fertiliser in crop production.

Komerční banka has provided project financing, granting a loan of CZK 29 million for project cost co-financing and a loan of CZK 23 million for subsidy pre-financing. The investor has obtained a contribution of CZK 23.32 million for the construction from the Rural Development Programme and CZK 10 million the investor using its own resources. Capital expenditure on the construction of the station totals CZK 60.2 million.

"Komerční banka has extensive experience in the financing of biogas station development and with obtaining the related subsidies. It has lent CZK 692 million for the development of 12 biogas stations to date," says Jan Hanuš, Head of Municipalities and Public Support Programs. According to Jan Hanuš, average costs of construction are around CZK 70 million per biogas station. Given the specificity of these projects, any credit is evaluated individually with regard to the expected return on assets and the current situation on the energy market.

In the Czech Republic, the government supports the development of biogas stations. Czech legislation guarantees the feed-in tariffs to biogas station operators for the electricity they produce. The current feed-in tariff is laid down in the Energy Regulatory Office's relevant price decision and amounts to CZK 4.12/kWh. "Moreover, revenues from biogas station operation are exempt from income tax in the year of commissioning and for the five following years," adds Jan Hanuš.

Under subsidy schemes, investors can obtain a contribution of up to 30% of the eligible costs for the construction of renewable energy plants. Three sources of subsidies are currently available:

  • Measure III.1.1 Diversification of Non-Farming Activities under the Rural Development Programme
    The purpose of this scheme is to support 119 biogas station projects between 2007 and 2013 (in the first three calls 38% of the planned biogas stations have been supported). The fourth biogas station call was closed on 9 March 2009, and we expect the next round of applications for subsidies to be opened in 2010.
  • Area of intervention 3.1 in Priority Axis 3 of OP Environment
    Currently the 10th call under 3.1.2 (electricity generation from renewable energy sources) is open. Until 30 June 2009, applications for subsidies can be filed, among others for the construction of biomass fired power stations (solid, gaseous or liquid biomass). Projects under 3.1.3 (heat & power generation from renewable energy sources) are also accepted – investors can apply for subsidies for cogeneration units firing biogas, landfill gas and sludge gas, including equipment for biogas production, i.e., biogas stations.
  • Biogas station development can also be supported under the EKO-ENERGIE scheme (under OP Enterprise and Innovation) and the Záruka scheme from Českomoravská záruční a rozvojová banka, but farming entities may not be the beneficiaries.

Komerční banka offers advisory services provided by its specialised KB EU Point to those who are interested in receiving the subsidies. Komerční banka's relationship managers will search, free of charge, for subsidy schemes appropriate for each specific project and the bank's EU regional specialists will provide consultations right on the spot, on the project site. Specialised companies with proven experience and expertise then prepare applications for subsidies and take care of complete project administration for KB's clients. The selection of a particular company is left up to the client. The bankers also recommend the optimum project financing, compliant with the subsidy conditions. More information about KB EU Point's services can be obtained from the relationship manager or at www.eupoint.cz.

Komerční banka is one of the best run universal banks in Central Europe. It provides comprehensive services to clients in the areas of retail, corporate, and investment banking. The Komerční banka Group's 8,930 employees serve 1,632,000 clients, who can use an extensive network of 397 points of sale throughout the country. Komerční banka currently operates 679 ATMs and more than 958,000 of its clients use one of direct banking channels.

Komerční banka is part of the Société Générale Group, one of the largest banking groups in the euro zone (in terms of market capitalisation), whose 163,000 employees serve more than 30 million individual clients worldwide.