Kazan, December 1, 2006
– International Finance Corporation (IFC) and Tatfondbank have signed an agreement for cooperation to support the advancement of energy efficiency technologies in Tatarstan. “This partnership will help stimulate sustainable private sector financing of energy efficiency projects in the region by leveraging the unique strengths of IFC as an international financial institution and of Taftonbank as Tatarstan’s second largest bank,” said Miles Stump, IFC Program Manager.
In February 2006, the State Council of Tatarstan adopted “Energy Efficiency in the Republic of Tatarstan in 2006-2010,” a program that aims to promote energy efficiency in the region. IFC and Tatfondbank will work together to support the implementation of this program.
The cooperation agreement was signed within the framework of IFC’s Russia Sustainable Energy Finance Program, funded by the Global Environmental Facility, Denmark’s Environmental Protection Agency, Finland’s Ministries of Foreign Affairs and Trade and Industry, and IFC’s Sustainable Financial Markets Facility. An efficient start of the cooperation has become possible as a result of the activities of the ‘Energy Efficiency – Volga Region’ subprogram, financed by the Free State of Saxony through its IFC Trust Fund.
The agreement paves the way for IFC and Tatfondbank to jointly design a new financial product of the bank that will support the development of energy efficiency projects. Along with financing, local enterprises will benefit from IFC’s technical assistance and advisory services to help them identify ways to save energy, become better informed about opportunities to supply equipment and engineering services, and develop effective business proposals for attracting financing for energy efficiency projects. “Ultimately, this will enable enterprises to increase profitability while contributing to the improvement of Tatarstan’s energy efficiency,” Mr. Stump said.
While energy intensity in Russia varies from region to region, the country’s overall energy intensity is more than 6 times that of Canada and more than 12 times that of the UK. “Closing the energy efficiency gap would directly benefit the Russian economy while also reducing pollution and green-house gas emissions,” according to Mr. Stump. To help achieve this goal, IFC developed the Russia Sustainable Energy Finance Program which aims to stimulate sustainable private sector financing of industrial modernization projects that improve energy efficiency. Within the framework of the program IFC provides financing to Russian banks and leasing companies in the form of long-term credit lines, to be used to finance industrial modernization projects that produce substantial energy efficiency benefits. This enables banks to provide long term financing (up to 5 years) to enterprises at competitive market rates.
“The development of solid local financial institutions and promotion of investments with sound environmental benefits is an integral part of IFC’s overall strategy, as well as that of its donor partners. The cooperation agreement with Tatfondbank is an important step in helping IFC, its donor partners, and the Republic of Tatarstan achieve their strategic objectives with respect to energy efficiency,” Mr. Stump said.
For the editor
Tatfondbank
is a universal commercial bank and the second largest bank in the Republic of Tatarstan and Volga region, having 72 outlets. According to the INTERFAX’ Center for Economic Analysis, the bank rates 43rd among the 50 largest federal Russian banks in the volume of assets.
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 technical assistance and advice 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 technical assistance and advisory services. For more information, visit
www.ifc.org
.
IFC Russia Sustainable Energy Finance Program
The Russia Sustainable Energy Finance Program is acting as a catalyst for energy efficiency market in Russia by bridging project developers, financial institutions and vendors. It has its focus on stimulating investments into energy efficiency by supporting financial institutions in building targeted financial services.
The Program consists of two parts: investment and technical assistance. IFC provides long term credit lines (up to 5 years) to banks and leasing companies to be used exclusively for financing energy efficiency projects. IFC supports those financial institutions and their clients by providing consultations on technical, financial and legal issues, as well as holding seminars on topics of financing energy efficiency.
