IFC Expands Energy Efficiency Program in Russia in Partnership with MDM Bank
Moscow, Russia, July 2008—IFC has signed a loan facility with Russia’s MDM Bank to help expand energy efficiency financing to local companies. A $35 million loan for IFC’s own account will support MDM Bank’s energy efficiency lending, while a $500 million syndicated loan will support the trade finance projects of the bank’s clients. The syndication is the largest ever by IFC in Russia, and the largest deal by a private locally owned bank since August 2007.
Sustainable energy has become a global priority, and energy efficiency is central to IFC’s climate change strategy. Russia has the potential to reduce its energy consumption by up to 45 percent and preserve its natural resources for future generations, but this will require private sector investment and focus.
Michel Perhirin, CEO of MDM Bank, said, “This deal marks an important achievement for us. We are pleased with the success of the energy efficiency product line introduced about a year ago. IFC’s new commitment will allow MDM bank to expand its offering significantly. The syndicated loan represents a serious vote of confidence in MDM Bank. We are extremely pleased with the level of interest from investors and look forward to putting this funding to work for our clients in the nearest future.”
Jyrki Koskelo, IFC Vice President for Europe, Central Asia, and Global Financial Markets, said, “IFC provides Russian banks with longer-term credit lines designated for on-lending to companies to help upgrade their old, energy-intensive equipment. We also provide advisory services to help banks and their clients maximize their investments in energy efficiency. These investments have a very high economic rate of return for Russia as they offer the least expensive method to both improve competitiveness of industries as well as increased production / exports due to saved energy. MDM Bank is one of our main partners in Russia. It began rolling out its energy efficiency finance product across the country last year, and we are pleased to strengthen our cooperation by supporting its activities in sustainable energy”.
The initial mandated lead arrangers for the IFC B-Loan are IFC, CALYON, Commerzbank Aktiengesellschaft, DZ BANK, Frankfurt am Main, Emirates NBD, Erste Bank der oesterreichischen Sparkassen AG, ING Bank N.V., Intesa Sanpaolo SpA, Korea Development Bank, Raiffeisen Zentralbank Oesterreich AG, Sumitomo Mitsui Finance Dublin Limited, and Wachovia Bank. CALYON, Erste Bank, ING and RZB acted as joint bookrunners.
Other banks joining the IFC B-Loan are: Alpha Bank A.E., The Governor and Company of the Bank of Ireland, Agricultural Bank of Greece SA, Banco Bradesco Luxembourg S.A., First Gulf Bank PJSC, Piraeus Bank S.A., WGZ BANK AG, Agricultural Bank of China, Banco Itaú BBA, Bank Leumi Le Israel B.M, BankMuscat S.A.O.G., BANQUE BIA, Pohjola Bank plc, State Bank of India, Zúrcher Kantonalbank and Citibank N.A.
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