Contacts:
IFC (Washington DC):
Lucie Giraud
Phone: +1 202 458 4662
Email: lgiraud@ifc.org
Ludi Joseph
Phone: +1 (202) 473-7700
E-mail: ljoseph@ifc.org
WASHINGTON, D.C., January 23, 2006 – Leaders at the World Economic Forum, Davos, Switzerland, January 25-29, will grapple with global energy challenges and how to meet the growing demands of developing countries. While technologies that make energy more efficient are improving rapidly in many countries, these technologies are not readily available in the emerging markets.
The International Finance Corporation, the private sector arm of the World Bank Group, has for the past ten years helped local banks finance energy efficiency projects in Eastern Europe and has shown companies in these countries that energy efficiency is also good business.
Soundbite 1 (in English): Ian Crosby, Projects Officer, IFC, Washington, D.C.:
There are a number of different reasons why energy efficiency is good for business. If you are using less energy, then you’re paying less so you increase your profit margins. There are good environmental benefits, which means that maybe you are reducing pollution taxes that you have to pay. For other companies there is also the opportunity to sell equipment which is more efficient than their competitors.
In 2003, IFC, in cooperation with the Global Environmental Facility (GEF), expanded its energy efficiency programs in five more Central European countries by providing banks in those countries with guarantees, which they, in turn, used to support loans for new, more energy-efficient technology.
In the Czech Republic, an IFC-supported energy efficiency program made it possible for Delta Bakery – the country’s largest industrial bakery – to swap its old inefficient boiler for a new one that powers the bakery’s heating system and pre-heats the dough. The 300,000 euro investment in this project resulted in 60,000 euros worth of annual energy savings, thus allowing the investment to pay for itself in six years.
Soundbite 2 (in English): Jaroslav Pomp, Spokesperson, Delta Bakery, Nymburk, Czech Republic:
In the Czech Republic, the main problem is that the bakery business is not very profitable. The price of pastry and bread is very low and, of course, all bakeries must look for some savings. That’s why we decided for new projects of boilers in cooperation with IFC and Siemens. Now I can say that savings are very good. For example, one plant had record savings, more than 50,000 euros per year. So it’s very important for us and just now we installed four new boilers in our bakeries and we are preparing new projects for other bakeries.
In Hungary, IFC projects have replaced wasteful and inadequate public lighting in small towns and villages in the poorest parts of the country with efficient technology and similarly resolved frequent disruptions in hospital heating services with new technology.
After a series of successful projects in Eastern Europe, IFC is now working with Russian banks to finance projects in companies that often use outdated heating systems and antiquated production lines. The country, which consumes about ten times more energy per unit of production than developed countries, thus has huge potential for energy savings in its industrial sector.
Soundbite 3 (in English): Rachel Kyte, Director, Environment and Social Development, IFC:
IFC has more than 10 years of experience working with private companies and with financial institutions finding ways for energy efficiency to reward their bottom line and for companies to have better access to capital. This global expertise means that in Russia we are the partner of choice on energy efficiency.
In Rostov-on-Don, a southern Russian city, IFC is assisting Centrinvest Bank in financing several energy efficiency projects. One such project involves the installation of individual heat stations and meters in 400 homes. Heat supply to these homes currently costs $7.7 million per year, whereas new heat stations will reduce the cost to $4.6 million, providing residents with a 40 percent saving. The investment will be paid back within a year and a half and consumers will have the benefit of better and cheaper heating services.
Soundbite 4 (in Russian): Vasily Vysokov, Centrinvest Bank, Rostov-on-Don, Russia:
When talking about energy efficiency, people usually mean industrial sites, replacing equipment, and introducing new technologies. But it is important that in Russia energy efficiency reaches every single person. This is why at Centrinvest, along with loans for small and medium investment projects aimed at using energy effective technologies, we developed a brand new product with IFC: loans aimed at increasing the effectiveness of how energy resources are spent in residential utilities.
In Russia, IFC provides client banks and leasing companies with credit lines and credit enhancement packages coupled with training to assist investors in structuring and marketing their financial products. Loans supported by IFC’s partners go to varied projects such as cogeneration, production improvements and housing renovation.
Soundbite 5 (in Russian): Miles Stump, Project Manager, IFC, Moscow, Russia:
IFC provides five-year credit lines to financial institutions so that they provide loans to companies that invest in energy efficiency. IFC also has a technical support program and provides consultations to help financial institutions to better understand risks and opportunities associated with energy efficiency.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
