2005 - present
The Program is supported with funds from the Global Environment Facility, Danish Energy Agency, Ministry for Foreign Affairs of Finland and Ministry of Economy and the Employment of Finland.
www.ifc.org/russia/energyefficiency
The Russia Sustainable Energy Finance Program works across Russia to encourage investments in energy efficiency projects. The project helps financial institutions and companies to assess modernization projects, and provides long-term credit to banks to enable energy efficiency loans. By participating in public information campaigns, the project also works to raise general awareness about the need for greater energy efficiency in Russia.
The Challenge
Energy prices are increasing rapidly in Russia. However, many industrial companies are still using energy-intensive equipment that was installed more than 25 years ago – nearly 48 percent of production assets in Russia date from before 1985. Company managers take an overly conservative view when it comes to assessing energy efficiency potential. The project’s survey of 625 industrial companies showed that industrial enterprises underestimate energy savings opportunities by 2-3 times, and only 24 percent of companies applied for loans to finance energy efficiency projects. Financial institutions, on the other hand, are reluctant to finance energy efficiency loans due to the higher perceived risk and longer-term financing requirements.
The IFC Approach
The Russia Sustainable Energy Finance Program provides a wide range of advisory services to financial institutions, their clients, and other market players to support investments in energy efficiency. IFC helps financial institutions to develop local expertise in energy efficiency-based lending through training seminars, joint promotional activities, resource materials, and advice on transactions. The project also works with end-user companies, to assist in analyzing energy efficiency projects under consideration and in identifying opportunities to save energy.
To encourage growth of the energy efficiency market, the project helps vendors and product developers build relationships with potential clients and with financial institutions. To educate the public about the need for greater energy efficiency, the project also conducts and distributes market surveys and information campaigns. IFC complements these advisory services activities with investment, by providing Russian financial institutions with dedicated long-term energy efficiency credit lines to promote loan generation.
Achievements to Date
To date, 12 partner financial institutions have financed over 250 projects worth $213 million (of which $166 million was the volume of loans disbursed by the FIs). These projects are expected to avoid 453,000 tons of direct and indirect GHG emissions annually.
From July to December 2011, financial institutions (FIs) disbursed $24,619,000 of energy efficiency (EE) loans. Forty-six new projects were financed by Center Invest Bank, Credit Bank of Moscow, Locko Bank and Transcapitalbank with the following impact:
1) Saving the equivalent of $2,905,000 in energy costs per year;
2) Contributing to avoidance of nearly 8,900 tons/year of direct greenhouse gas (GHG) emissions;
3) Saving 21,136 tons of direct GHG emissions over the investments’ lifetime.
For more information please contact Maxim Titov, Project Manager, MTitov@ifc.org
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