Moscow, July 27, 2007 — IFC, a
member of the World Bank Group, today signed an advisory services agreement
with MDM Bank to establish a new product that supports development of energy
efficiency finance. This will include a $20 million credit line to help
boost the bank’s energy efficiency lending practices. The credit line
is part of a recent $100 million loan that IFC provided to the bank in
According to the International Energy
Agency, Russia’s overall energy intensity is more than six times that
of Canada and 12 times that of the United Kingdom. Increasing demand
for energy and rising costs are having a significant impact on profits
for Russia’s industrial companies. Inefficient use of energy cuts
into their profit margins and makes these companies less competitive in
the global marketplace. The owners and managers have started to realize
this problem, and their efforts to reduce energy consumption are opening
new opportunities for the banking sector.
Russia has high potential for energy
efficiency lending. To reduce electricity consumption by 10 percent, industrial
enterprises need to invest about $9 billion. Energy efficiency investments
are a commercially viable way for Russian enterprises to increase competitiveness
and reduce their carbon footprint.
Jyrki Koskelo, IFC Director for Global
Financial Markets, said, "We are pleased that one of the leading banks
in Russia – MDM Bank – has recognized the opportunity for energy efficiency
investments. Closing the energy efficiency gap will benefit the local economy
and have a positive impact on the environment.”
Michel Perhirin, Chairman of the Board
at MDM Bank, commented, “Energy efficiency finance is a promising market
in Russia. With IFC support, the bank will launch a new product for financing
such projects. This will help us do more business and help our clients
become more profitable. Together we will contribute to reducing carbon
emissions in the country."
IFC, a member of the World Bank Group,
fosters sustainable economic growth in developing countries by financing
private sector investment, mobilizing capital in the international financial
markets, and providing advisory services to businesses and governments.
IFC’s vision is that poor people have the opportunity to escape poverty
and improve their lives. In FY06, IFC committed $8.3 billion, including
syndications, to 284 investments in 66 developing countries. For more information,
please 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 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, please 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’s Environmental Protection Agency, Finland’s
Ministry of Foreign Affairs and Ministry of Trade and Industry, IFC’s
Sustainable Financial Markets Facility, and the German state of Saxony.
About MDM Bank
MDM Bank was founded in December 1993
and holds a general banking license issued by the Central Bank of Russia.
It is a modern, universal financial institution that offers clients a full
range of services. Today, the bank is one of the most profitable in Russia.
It also has one of the highest credit ratings among privately owned Russian
banks: Standard & Poor’s (BB-, stable), Fitch Ratings (BB-, positive),
and Moody’s (Ba1). MDM Bank is the only Russian financial organization
that has been given a public corporate governance rating by Standard &
In 2007, MDM Bank received the “Corporate
Governance Editors Award” from Global Finance, which also named
it “Russia’s Best Foreign Exchange Bank.”