According to the terms of the agreement, Prime Finance Bank will set up an environmental fund, which will provide capital for projects that promote energy efficiency in Russia. The fund is worth EUR 2.2 million and NEFCO will provide EUR 1 million. The energy efficiency fund is also supported by IFC (a member of the World Bank Group), the Global Environment Facility (GEF) as well as the Finnish and Danish ministries of the environment. Moreover, IFC provides training and support for the staff at Prime Finance Bank in order to promote energy efficiency investments.
”We hope that this investment will stimulate the demand for energy saving technologies in Russian industrial enterprises and challenge other financial sector players in Russia to set up similar programmes, says NEFCO’s Senior Investment Manager, Ulf Bojö.
Compared to European levels, Russian energy consumption rates are quite high and currently the country consumes twice the same amount of energy in one administrative district as the Nordic countries consume in one year. High energy consumption levels are particularly common in the industrial sector where equipment is often as old as 25 years.
Although the recent financial crisis has rattled the financial credibility of many Russian banks and financial institutions, the small, conservative and cautious Prime Finance Bank has managed to maintain a solid financial reputation, and one of the objectives of the fund is to demonstrate that by investing in energy saving, companies can also save money and thereby boost the profitability of their business operations.
According to Mr. Bojö, there are several advantages for working with the Prime Finance Bank. First, NEFCO will benefit from the banks existing, extensive network of clients and partners. For its part, Prime Finance Bank will gain valuable experience on environmental banking and together the two financial organizations will create synergies which will result in efficient labour and costs inputs.
NEFCO has previously financed environmental banking in Ukraine and has, for example, worked with Bank Lviv in Western Ukraine, and gained valuable experience in the process. The joint environmental fund at Bank Lviv has, among other things, granted loans for frequency converters in the paper industry.
NEFCO is an international financial institution owned by the five Nordic countries Denmark, Finland, Iceland, Norway and Sweden. NEFCO finances environmentally-related projects and investments primarily in Russia, Ukraine, Estonia, Latvia, Lithuania and Belarus in order to generate positive environmental effects for the Nordic region. At present, the funds administered by the corporation are valued at some EUR 420 million.
For more information, please contact:
Ulf Bojö, Senior Investment Manager, NEFCO, +358 40 527 3699
Mikhail Tabunov, Chairman of the Board, Prime Finance Bank (PLC), +7 812 3313166
Mikael Sjövall, Communications Manager, NEFCO, +358 50 3535 045
