OREANDA-NEWS. November 10, 2009. The EBRD and the state savings bank Sberbank, Russia’s largest bank, today agreed to join forces to explore ways of helping key sectors of the economy to use energy more efficiently in a country which combines the possession of vast energy reserves with highly intensive use of this finite natural resource, reported the press-centre of EBRD.

EBRD President Thomas Mirow and Sberbank Chairman German Greff signed a Memorandum of Understanding (MoU) outlining how their institutions plan to work together to identify potential co-financing projects with energy efficiency potential across a broad spectrum ranging from schools to steel mills.

The Russian government has set a target of reducing the energy intensity of the national economy by 40 percent by 2020. Russia’s energy intensity is about three times that of the United Kingdom, India or Japan.

The signing also laid the groundwork for cooperation between the EBRD and Sberbank in further developing the carbon financing market in Russia, particularly regarding Green Investment Schemes. The Russian government recently named Sberbank as its agent for such transactions.

Carbon financing, which also covers emissions trading between private sector participants under the Joint Implementation Mechanism of the Kyoto Protocol, is crucial to attracting investments in energy efficiency because it provides financial incentives to those undertaking such projects.

Energy efficiency is a priority for Russia. The aim we share is to encourage the energy to be used more efficiency in what is one of the world’s most energy-intensive economies. Our cooperation offers a roadmap for doing this in a very practical way that would benefit not only Russia but also the rest of the planet, Mr. Mirow said at the signing.

Cooperation with Sberbank offers major possibilities for developing energy efficiency because of the vast reach of its branch network and its unparalleled access to Russian companies. Sberbank is a long-standing partner of the EBRD in Russia and can currently benefit from up to \\\\$130 million in trade-related EBRD guarantees covering import and export operations by Sberbank clients under the EBRD Trade Facilitation Programme (TFP).

The EBRD and Sberbank plan to work together to identify several large scale, stand-alone energy efficiency projects which may be considered for joint financing by the two banks.

The two institutions will also explore the possibility of Sberbank’s participation in the EBRD’s recently launched US300 million Russian Sustainable Energy and Carbon Finance Facility (RUSEFF).

The EBRD’s aim is to use this programme to channel long-term funds through the banking system for on-lending to clients implementing energy efficiency projects.

In 2006, the EBRD launched a sustainable energy initiative to address the climate change issue and promote a more efficiency use of energy in its countries of operation. The projects undertaken under this programme since then have resulted in annual reductions of 21 million tonnes in CO2 emissions.

In financial terms, the EBRD had by the end of 2008 provided EUR2.7 billion specifically for energy efficiency investments in 166 projects in 24 of its countries of operation. This EBRD financing translates into a total project value of €14 billion.

During the same period, EBRD energy efficiency-related investments in Russia amounted to EUR 755.2 million. The total project value of the Bank’s energy efficiency projects in Russia so far, including the part not funded by the EBRD, is EUR 3.7 billion.