Utilisation of geothermal water in the Riga/Jurmala region of Latvia for recreation and health : pre-feasibility study for an outdoor thermal swimming pool

Abstract

The main objective of this study was to investigate whether the relevant site specifics, the surrounding tourist attractions and general conditions of the geothermal resources in the Riga/Jurmala region would justify the investment required to refurbish and operate a modern international health spa with related tourist facilities. The study shows incontestably that the use of the very old sedimentary water of the Riga/Jurmala region of Latvia, which has excellent balneological properties, is both technically and economically feasible. The study describes in detail a proposed outdoor swimming pool health spa based upon the use of geothermal water for therapeutic and health cures. The cost estimate for the facility, which can accommodate some 500 visitors per day, comes to about 4,200,080 USD. The total capital investment will assumedly be provided 60% by borrowed money and 40% from equities. The loan period is assumed to be 7 years at 8% interest, with a grace period of 2 years. An economic viability assessment for the facility yields an internal rate of return of some 20% and a discounted payback of some 5 years based upon the above loan terms, a discount rate of 12% and a 25 year economic life span. The assessed economic viability may be deemed quite acceptable for this type of project.