Development of a small district heating reactor was started at VTT Technical Research Centre of Finland. The concept features a 50 MW reactor that operates at low temperature and pressure. Traditional LWR technology, passive safety functions and natural circulation are combined in the integrated design. This paper presents the thermal-hydraulic design and transient analyses done with Apros simulation software. The studied cases include station blackout with reactor trip and as an ATWS scenario, and small break LOCA in the lower downcomer. During the station blackout transients, both temperature and pressure remained at safe levels. The innovative containment design functioned as planned and was capable of efficient decay heat removal. The small break LOCA ceased the natural circulation, but the core was not uncovered at any point and the core temperatures remained low. The results from the thermal-hydraulic analyses are promising and show that the reactor design is capable of producing low temperature heat to the district heating network. The analyzed transients posed no risk to reactor safety, and the passive containment function was capable of removing decay heat efficiently. These preliminary analyses give valuable insight to the design work in the future.