Nizhniy Novgorod, December 12, 2007—IFC,
a member of the World Bank Group, is providing financing to NBD Bank to
help develop a new financial product for energy efficiency projects in
federal district. IFC has
issued a $15 million line of credit to the bank, of which $8 million will
be dedicated to this effort.
NBD Bank is the first regional bank to receive an IFC loan aimed at developing
energy efficiency financing for small and medium enterprises. The bank
will support companies in the manufacturing and services sectors that plan
to undertake energy efficiency modernization. It will provide funds in
either Russian rubles for up to five years or in U.S. dollars for up to
7.5 years. The maximum loan amount will be $2 million equivalent. The SMEs
will benefit from extended loan terms, a favorable interest rate, and a
grace period for up to a year.
“Our main goal is help smaller businesses develop and to promote the growth
of the whole region,” said Evgeny Maksakov, Head of Corporate Finance
and Clients Department of NBD Bank. “Cooperating with IFC will help our
clients become more efficient, as well as contribute to solving the region’s
According to the Russian Center for Energy Efficiency, the rate of economic
growth and increasing demand for energy will result in a significant deficit
by 2020. Energy intensity and rising energy costs in Russia are having
a substantial impact on profits for local SMEs.
Miles Stump, Manager for the IFC Russia Sustainable Energy Finance Program,
said, “The shortage of electric power-generating capacity and growth in
energy tariffs puts the competitiveness of Russian businesses at risk.
Recognizing this, company owners and managers have begun to place greater
emphasis on reducing energy costs.”
The market for energy efficiency financing in Russia has significant potential,
yet it is untapped. According to IFC estimates, a $35 billion investment
by the country’s industrial enterprises will reduce the energy consumption
rate by 37 percent. The benefits of this could be considerable, lowering
operational costs, increasing global competitiveness, and reducing greenhouse
“We are pleased that NBD Bank has joined IFC's energy efficiency program
and will be one of the first in the region to offer loans for energy efficiency
projects. We believe that this will help position the bank ahead of its
competitors,” said Timothy Krause, Head of IFC’s Financial Markets in
Central and Eastern Europe.
Today, IFC is investing over $400 million in energy efficiency projects
around the world.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people have the opportunity to escape poverty and improve
their lives. In FY07, IFC committed $8.2 billion and mobilized an additional
$3.9 billion through loan participations and structured finance for 299
investments in 69 developing countries. IFC also provided advisory services
in 97 countries. For more information, visit www.ifc.org.
IFC in Russia
Russia became a member and shareholder of IFC in 1993. IFC’s investment
portfolio in the country currently stands at $2.48 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.
The IFC Russia Sustainable Energy Finance Program is designed to stimulate
investment in energy efficiency by helping financial institutions build
energy efficiency finance services. The program consists of financing
and advisory services. IFC provides credit lines to banks and leasing companies
that are used exclusively for financing energy efficiency projects. IFC
supports these financial institutions and their clients by providing consultations
on technical, financial, and legal issues, as well as holding seminars
on financing energy efficiency. The program is supported by the Global
Environment Facility, Denmark, Finland, the German state of Saxony, and
About NBD Bank
Founded in 1992, NBD Bank is an interregional bank based in Nizhny Novgorod,
Russia. The bank specializes in serving small and medium enterprises. It
has a network of 17 offices in three Russian regions: the Nizhny Novgorod
and Ivanovo regions and the Chuvash Republic.