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. Last Updated: 07/27/2016

IFC Urges Russian Firms to Save Energy

The International Finance Corporation on Tuesday urged Russian medium and small businesses to take out bank loans for energy-saving efforts as electricity and natural gas prices are set to gradually rise to market levels by 2011.

Most companies are reluctant to adopt energy-saving measures because they do not have enough cash to fund them, a survey released by IFC on Tuesday said.

"It is an astonishing and fatal mistake from our point of view," said Miles Stamp, director of the Russian arm of the World Bank's IFC, speaking at a news conference to present the survey.

In 2006, IFC provided more than $20 million to Russian banks for lending to customers in the regions to fund energy-saving programs, he said. It plans to disburse another $80 million over the next two years, he said.

Expenditure on energy accounts for about 13 percent of total production spending at businesses, said Yana Gorbatenko, the deputy head of IFC's program to stimulate investment in energy saving. The costs will rise proportionately as electricity prices are expected to go up around 60 percent by 2011, the IFC representatives said.

Russian businesses could increase profits by 5 percent to 7 percent if they save energy by introducing new technology and equipment such as modern lighting systems, Gorbatenko said.