Over 9,000 boilers have been installed in the Czech Republic, including 550 cogeneration units, two-fifths of which are more than 30 years old. The Czech government is actively promoting energy efficiency. A number of programs exist to promote efficiency. The term of the performance contract includes construction time and an eight-year amortization period during which the hospital is guaranteed that the savings will cover all debt service payments. If the hospital decides to cancel the contract along the way, it would pay a cancellation fee, which is pre-calculated based on anticipated revenues.
Project sponsors state that financing the project was difficult and took about one year to arrange.
The main barriers encountered were the difficulties of qualifying for long-term financing and finding terms with a reason able interest rate. While this is a small project and small projects are difficult to finance, it is representative of the typical size of investment in energy efficiency projects. The apparent success of this case, however, may illustrate a broader opportunity that exists in improving the energy efficiency of the industrial and commercial sector of the Czech Republic. The key issue here is whether the project's approach can be replicated many times over. This would spread the development costs over many similar projects.