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RFV contract to add annual HUF 1.5 billion to EBIDTA

Energy efficiency company RFV on Friday said its majority-owned unit won a contract to modernize and operate the district heating system of the Romanian city of Zalau. The 49-year contract will add an annual HUF 1.5 billion to RFV's EBIDTA line.

The modernization of the district heating system is RFV's biggest development thus far, the company said. It will finance 30% of the project's cost with its own resources and 70% with proceeds from bank loans and a corporate bond.

RFV was named the winner of the tender by the Zalau local council earlier in the day. A contract is expected to be signed within 30 days and RFV plans to start work on the project by the middle of November.

The four-year project is expected to cost HUF 9 billion, of which 70% will be booked in RFV's 2010 and 2011 business years.

Revenue from operating the system is expected to reach an annual HUF 4 billion after RFV reconnects some 5,000 homes. Earlier, 21,000 homes were connected to the system, but it has deteriorated to the point that only 750 homes and 45 institutional buildings are connected.

RFV recently won another tender to expand and operate a district heating system for the Romanian city of Gheorgheni.

RFV has invested HUF 7 billion in energy efficiency projects thus far. (MTI-Econews)