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Moscow, 18 January 2007 -
The International Finance Corporation, the private sector arm of the World Bank Group, and Delovaya Rossiya, a leading Russian business association, held a press conference in Moscow today to discuss results of an IFC-led survey on the energy efficiency practices of Russia’s small and medium enterprises.
In the survey,
On the Road to Energy Efficiency: Experience and Prospects,
IFC assessed how Russian enterprises use energy resources, discussed ways they could become more energy efficient, and observed their attitudes on financing energy efficient projects. The survey sampled 625 enterprises representing five industries and located in five of the country’s most developed industrial regions.
The survey found that industrial enterprises far underestimated the potential energy they could save with improved energy efficiency systems and practices—putting possible savings at only eight to10 percent versus the actual 20 to 30 percent. Only 31 percent of the companies surveyed have an energy efficiency strategy, and these companies benefited more. The survey also found that although about two-thirds of the companies believe that insufficient internal cash flows are a major barrier to launching energy efficiency programs, they underestimate the advantages and availability of external financing. Only 24 percent had applied for bank loans to finance such projects, but 90 percent of these actually received financing.
While energy intensity in Russia varies from region to region, overall it is more than six times that of Canada and more than 12 times that of the United Kingdom. Increasing demand for energy and rising energy costs in Russia are having a significant impact on profits for the country’s small and medium enterprises.
Commenting on the survey results, Miles Stump, IFC’s Program Manager, said, “Many Russian companies are still inefficient in their use of energy resources compared to enterprises in Europe and North America. This inefficiency cuts into their profit margins and makes them less competitive in the global marketplace. Closing this gap would directly benefit Russian businesses while also reducing pollution and greenhouse gas emissions.”
The survey was conducted as part of IFC’s Russia Sustainable Energy Finance Program and funded by the Global Environment Facility, Denmark’s Environmental Protection Agency, Finland’s Ministries of Foreign Affairs and Trade and Industry, IFC’s Sustainable Financial Markets Facility, and the government of Germany’s Free State of Saxony.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides advisory services to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in advisory services. Energy efficiency is a core product line for IFC. In 2006, IFC has invested over $400 million in energy efficiency programs world wide. For more information, visit
www.ifc.org
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IFC in Russia
Russia became a member and shareholder of IFC in 1993. Since then IFC has invested $3.4 billion in the country, including $527 million in syndicated loans, in over 130 projects across a variety of sectors. In FY06 IFC’s investments reached $519 million. IFC’s investment portfolio in Russia stands at $2 billion, making it the largest country exposure for IFC globally. IFC has invested in key sectors, including agribusiness, banking, construction materials, health care, housing finance, information technologies, infrastructure, leasing, mining, oil and gas, pulp and paper, retail, and telecommunications. For more information, visit
www.ifc.org/europe
.
IFC’s Russia Sustainable Energy Finance Program
IFC’s Russia Sustainable Energy Finance Program is designed to stimulate investment in energy efficiency by supporting financial institutions in building their services for energy efficiency finance. The program offers investment and advisory services. IFC provides long-term credit lines to banks and leasing companies to be used exclusively for financing energy efficiency projects. Program experts also support project developers, companies, and financial institutions by providing consultations on technical, financial, and legal issues.
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