Russia, January 15, 2013
—IFC, a member of the World Bank Group, is providing long-term debt and equity in the amount of 425 million Russian rubles (around $14 million) to KKS Group, an independent utility, to support the company in supplying energy-efficient space heating and hot water to customers in the Tula and Kemerovo regions of Russia. IFC has also agreed to provide additional funding as certain new projects are realized.
The IFC long-term finance package, an equity investment of 175 million Russian rubles ($6 million), and a long-term subordinated loan of 250 million Russian rubles ($8 million), will help the company upgrade heating assets with modern technology, thus improving the quality and reliability of service to its customers in central Russia and Siberia. This financing will also help raise efficiency and reduce losses, thus reducing greenhouse gas emissions and mitigating climate change.
“IFC’s long-term financing will allow KKS to implement a major capital investment program," said Ilya Brodsky, a director of Spring, a research and investment group that is the biggest investor in KKS. "We hope that a reliable partner like IFC will also help us attract other investors, further expand our reach, and improve the quality and efficiency of our services.”
Tomasz Telma, IFC Director for Europe and Central Asia, said, “Promoting private sector participation in infrastructure, including basic utility services, is an important part of IFC's strategy in Russia. This project will demonstrate to other private sector players and investors that, with modern rehabilitation technologies, utilities – the sector in which capital needs in Russia are enormous – can be a profitable business, benefitting municipalities, service providers, and their customers.”
This investment is part of IFC’s strategy in Russia to support private sector development and encourage economic growth. The Russian Federation became a member and shareholder of IFC in 1993. Since then, IFC has invested $10.1 billion in Russia, including $3.2 billion in syndicated loans, and is involved in 270 projects across a variety of sectors. IFC’s investment portfolio in Russia stands at $2.26 billion, the fourth-largest country exposure for IFC globally.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit