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Post-crisis loans for Center-Invest Bank customers

On 19 November, in Frankfurt, Center-Invest Bank and the International Finance Corporation (IFC, member of the World Bank Group) signed an agreement opening two five-year credit lines: RUR600m for lending to SMEs in the agrarian sector, and RUR300m for financing housing and communal services energy efficiency projects. Under the agreement, IFC has also opened a USD10m trade finance guarantee facility to expand the foreign trade operations of Center-Invest’s SME customers in southern Russia.

Center-Invest Bank and IFC also signed an agreement on technical assistance: IFC will participate in the development of new banking products for housing and communal services management companies and private homeowners.

The funds accessed under these agreements will be used to finance our customers’ post-crisis development projects. In particular, IFC will share with Center-Invest its expertise in energy-saving projects for residential buildings. And in agriculture, we will be financing the introduction of modern technologies for the vegetable growing and processing sectors, enabling our customers to meet international quality standards.

Center-Invest Bank is already providing loans to housing cooperatives and residential building management companies for the introduction of energy-efficient equipment and technologies, including: the installation of metering systems (heat, water and electricity meters for whole blocks of flats), energy-efficient windows and various types of automatic equipment; modernising and repairing lighting systems; winterizing and repairing walls and roofs; and repairing pipes.

“With long-term finance for energy-efficiency projects, our customers will be able not only to reduce the cost of their communal services, but also to use innovative technologies that will make their lives more comfortable”, says Chairman of the Board of Center-Invest Bank, Dr. Vasily Vysokov. “The new projects are not simply about finance. They are also designed to overcome the social and legal barriers that arise when introducing new technologies in the housing sector and agribusiness. The new agreements are not anti-crisis measures; rather, they will provide finance for southern Russia’s post-crisis development. The agreements include not only technical and financial engineering for the housing sector and agribusiness, but also social engineering. These banking products are more complex, but it is precisely such comprehensive products that will become a basis for a sustainable post-crisis economy. A good tradition has developed: all of IFC’s new projects in Russia start with an appraisal by Center-Invest Bank, southern Russia’s “reform laboratory”.

IFC has been working with Center-Invest Bank since 2002. We were the first bank in Russia to participate in the IFC’s Russia Sustainable Energy Finance Program. The SMEs that have taken part in this programme have not only upgraded their equipment, they have also reduced their energy costs.

Our experience of introducing energy efficiency programmes in the Southern Federal District shows that projects designed to cut energy costs can generate savings of up to 70%.

Lars Thunell, IFC Executive Vice President and CEO, said at the signing ceremony: “Addressing climate change and supporting agribusinesses are global priorities for IFC. We are pleased to work with Center-Invest Bank to expand financing for energy efficiency in Russia’s housing sector and to promote lending to underserved small and medium enterprises in the agriculture sector.”

Center-Invest Bank is often called southern Russia’s “reform laboratory”. This definition stems from the bank’s cooperation with IFC. In 2002, Center-Invest Bank became IFC’s first regional bank partner for its SME lending programmes. Today, approximately 40,000 SMEs are Center-Invest customers. In 2004, working with IFC, we were the first Russian bank to introduce a Corporate Governance system that was in line with best international practice. Center-Invest was also the IFC’s first bank partner for its energy-efficiency programme. In 2007 we became the first Russian bank to be a finalist in the Sustainable Bankers of the Year category of the Financial Times and IFC Sustainable Banking Awards.