The second category of projects eligible for financing is related to mass energy supply such as district heating and combined heat and power generation for industrial complex. Investment in renewable sources of energy constitutes the third category of projects eligible for concessionary financing under the REU fund. Table 3.2.2 Financial support granted to projects during 1998 top 4. Terms of lending The Fund permits to cover two types of expenses including installation costs and working capital costs. The loans can cover installation costs related to the expenses for the purchase of the energy saving facilities and their installation.
Loans can also cover retrofit works, design and superintendence and the test run of the facilities.
In the case of mass energy supply projects executed by local governments and government-owned institutions, the expenses for the purchase of the building site for the purpose of installing facilities may be included. In the case of provincial energy development projects executed by local governments the expenses for feasibility studies may also be included. Permitted loan components for working capital are confined to the expenses needed for the operation of the facilities for the initial 3 months period. Loans carry 5.5 - 7.5 per cent of interest rate equivalent to about half of the going market or prime rates. Up to 90-100 per cent of investment cost can be covered by loans.