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IFC and MDM Bank Promote Energy Efficiency Investments in Russia


In Moscow:
Maria Ovchinnikova
Phone: (7 495) 411 7555
E-mail: movchinnikova@ifc.org

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 June 2007.

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."

About IFC
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 & Poor’s (6+).

In 2007, MDM Bank received the “Corporate Governance Editors Award” from Global Finance, which also named it “Russia’s Best Foreign Exchange Bank.”

In Moscow:
MDM Bank
Tatiana Levagina
E-mail: tatiana.levagina@mdmbank.com