CURRENT PROJECT
Russia Sustainable Energy Finance Program
THE CHALLENGE
In the CIS region the amount of energy used per unit GDP is 2-4 times that used in modern industrialized economies. Energy prices have historically been low in comparison to the world market but this is changing. Fuel and electricity prices are rising, and distribution networks that are old and under-capacity are creaking with the strain of economic development. In a world where climate change is increasingly at the forefront of many peoples’ minds, the challenge in these transition economies of the Former Soviet Union is to ensure that new investments in industry, residential accommodation, commercial and public buildings use the most energy efficient technologies that are economically viable.
THE IFC APPROACH
IFC’s energy efficiency projects are structured around financial institutions, to help them develop their own energy efficiency finance products; industrial clients, to help them improve the efficiency of their own operations; energy generators, to assist them invest in renewable energy technologies; and national governments, to help them develop policies that stimulate investment in sustainable energy projects. Our projects:
Provide financial products for sustainable energy loans. IFC provides long-term credit lines or risk sharing facilities to select financial institutions. These financial products are completed by a structured package of advice – IFC is advising 5 banks and one leasing company in Russia on developing and implement a sustainable energy lending strategy.
Facilitate project generation in energy efficiency investments. IFC works with end-user companies to help them assess the cost benefits of implementing new energy efficient equipment, as well as assisting financial institutions to evaluate potential EE loans.
Improve the market awareness. Projects conduct detailed market studies on the feasibility of energy efficiency products to inform stakeholders about the potentials in the market. IFC has delivered 41 seminars for 706 companies and financial institutions on EE investment finance in Russia.
Raise public awareness. Projects conduct large-scale public information campaigns and raise awareness in the media for energy efficiency. IFC has helped facilitate the launch of a large-scale social advertising campaign in Moscow called “Save Energy!” by partnering with the Moscow city government, and has generated more than 50 mentions in mass media on the need for energy efficiency.
ACHIEVEMENTS TO DATE as of July 1, 2007
Long-term financing enabled for energy efficiency projects. Through financial intermediaries in 7 countries of Central and Eastern Europe and the CIS. IFC has mobilized total investments of over $150 million in financing of sustainable energy projects. It has enabled $14 million in energy efficiency financing in Russia since 2005 through targeted credit lines to partner banks, financing 16 modernization projects. In Central and Eastern Europe, IFC has provided nearly $35 million in loan guarantees for energy efficiency projects.
Decrease in energy costs for SMEs. The total energy cost reduction per year in Russia is estimated at $4 million; in addition, non-energy cost reduction per year will amount to $1.1 million.
Development of market capacity for energy efficiency loans. IFC helped finance the first commercial wind project in the Czech Republic, as well as the largest PV solar plant in Central and Eastern Europe.
Energy efficiency in housing. IFC has been working with banks in Hungary to mobilize more than $87 million in investment in building renovations for energy efficiency.
IFC’s FINANCIAL EXPERTISE
In FY2006, IFC invested $1.7 billion in projects with clean energy components. As an institution that provides both investment and advisory services, IFC is well-placed to help spur the market for sustainable energy efficiency financing. We can mobilize long-term capital to finance energy efficiency products and provide up to 50% of the principal amount for loan guarantees. Regional offices can offer tailored advisory assistance to individual banks, end users and vendors to help them assess the benefits of modernization. IFC’s Russia Sustainable Energy Finance Program has offices in 5 cities throughout Russia, to ensure that it can adapt and stay on top of regional needs.
Commercializing Energy Efficiency Finance Program
CONTACT INFO
IFC Advisory Services in Eastern Europe & Central Asia
Ian Crosby
Senior Operations Manager, Sustainability
36/1, Bolshaya Molchanovka Str., 3rd Fl.
Moscow 121069, Russia
Tel: +7 (495) 411-7555
Fax: +7 (495) 411-7556
International Finance Corporation
Russell Sturm
Sustainable Energy Team Leader
2121 Pennsylvania Avenue, NW
Washington, DC 20433, USA
Tel: +1 (202) 458-9668
Fax: +1 (202) 947-4312
Other publications & resources on Energy Efficiency...
