Washington D.C., June 29, 2011—IFC,
a member of the World Bank Group, is making an equity investment in Dalkia
Eastern Europe, a new holding company created by leading energy and environmental
management firm Dalkia, to help modernize the district heating sector in
Russia and support environmental improvements in Lithuania.
IFC’s investment of up to €100 million
in Dalkia Eastern Europe will be made via a new share issue. It is the
first major investment in the district heating sector in Eastern Europe.
District heating generates heat in a central location and distributes it
to surrounding buildings to heat space or water, which is more efficient
and cleaner than operating individual boilers in each building. Dalkia
will use the capital to help expand its operations in Russia and other
new markets including Ukraine, and to increase energy efficiency and the
use of renewable energy in Lithuania.
IFC’s investment in Dalkia is expected
to help introduce better regulatory frameworks and contractual arrangements,
corporate-governance standards, and the environmental and social policies
needed to facilitate future flows of equity and debt into Russia’s district
heating sector. The investment also is expected to help district heating
services in Lithuania become more efficient, cost effective, and sustainable.
Dalkia’s operations in Estonia and Lithuania will become the operational
base from which Dalkia Eastern Europe is expected to grow.
Nena Stoiljkovic, lFC Director for Eastern
Europe and Central Asia, said, “IFC believes that more efficient operation
of district heating networks will bring significant economic and climate
change benefits. Savings from improved operations should impact municipal
budgets and the less affluent segments of society. We hope this investment
will encourage other investors to explore the opportunities in this sector.”
In one of the first international attempts
to enter the large Russian district heating market on a commercial basis,
Dalkia Eastern Europe will be managed from Moscow, while drawing on technical
and managerial expertise from its established district heating operations
in Estonia and Lithuania. Dalkia Eastern Europe is expected to begin expanding
its district heating operation in Russia through a joint venture with Quadra,
an integrated power and heat utility in the Kursk region.
As the first large-scale, direct involvement
in Russia’s district heating by an international industry investor, the
project represents a significant step toward the modernization that is
underway in the country’s other infrastructure sectors, including power
generation and transportation.
IFC, a member of the World Bank Group,
is the largest global development institution focused on the private sector
in developing countries. We create opportunity for people to escape poverty
and improve their lives. We do so by providing financing to help businesses
employ more people and supply essential services, by mobilizing capital
from others, and by delivering advisory services to ensure sustainable
development. In a time of global economic uncertainty, our new investments
climbed to a record $18 billion in fiscal 2010. For more information, visit