The development of a small PWR for district heating applications has been started at VTT Technical Research Centre of Finland, and the pre-conceptual design phase was completed by the end of year 2020. The heating plant consists of one or multiple 50 MW reactor modules, operating on natural circulation at around 120°C temperature. This paper presents the neutronics design and fuel cycle simulations carried out using VTT’s Kraken computational framework. The reactor is operated without soluble boron, which together with low operating temperature and pressure brings certain challenges to the use of control rods and burnable absorber. The reactor core is loaded with 37 truncated AP1000-type fuel assemblies with 2.0–3.0% fuel enrichment and erbium burnable absorber. The resulting cycle length is around 900 days. The results show that the criteria set for stability, reactivity control and thermal margins are fulfilled. More importantly, it is concluded that the new Kraken framework is a viable tool for the core design task.