(Microsoft PowerPoint - Ekaterina Galitsyna Pr\344sentation 2013

KFW Experiences:
Russian Federation
Bank aus Verantwortung
Russia: Modernis
Modernisation of economy and climate
financing
Challenges
• Divergence between political importance of the country and its need for modernization
• Considerable regional disparities
Specific approaches through KfW Development Bank
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Financial systems development: SME, modernization and innovation financing
Improvement of energy efficiency in enterprises, primarily SMEs
Environmentally friendly urban development (waste, district heating, waste water)
Climate change adaptation: e.g. nature and forest conservation
Climate change mitigation: e.g. rewetting of peatland
Support for transformation processes
On behalf of
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Federal Ministry of Economics and Technology
Federal Ministry of Finance
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety
Federal Foreign Office
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Russia: Modernisation of economy and climate
financing – Current programs
› Pilot Financial Initiative
› International Fund to Promote Enterpreneurial Activity
› Climate-Friendly Economic Activity in Russia: Nothern Dimension
Environmental Partnership (NDEP)
› Climate-Friendly Municipal Infrastructure in Russia (IKI+)
› Climate-Friendly Economic Activity in Russia: Introduction of Best
Available Technologies (DKTI)
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Financing Agriculture Value Chains
Financing Public Health Services
Protection of Forests, Climate and Biodiversity in Russia’s Far East
Rewetting of Peatlands in Belarus, Russia and Ukraine
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CoCo-operation in the Baltic Sea region –
Pilot Financial Initiative (PFI)
Background
› PFI is a new financing tool for sustainable economic development in the Baltic Sea region. Launched on the
initiative of the Russian CBSS Presidency PFI offers a financing facility for SME and for public-private
partnerships. A MoU outlining the Initiative was signed by the Partners at the Baltic Sea States Summit in
Stralsund 31 May 2012. Partners are the CBSS Secretariat, KfW and Vnesheconombank (VEB).
Fields of co-operation
› Finance for small and medium-sized enterprises (SMEs) in
field of innovation, modernization, and energy efficiency.
› PPP Projects focusing on sustainable development in
field of e.g. municipal and regional infrastructure, energy
efficiency, ecology and climate protection.
› Non-financial cooperation such as conferences, seminars,
round tables, training.
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PPP
PPP
PPP
Support for environment-oriented solutions
PFI:
PFI: CoCo-operation between KfW and
Vnesheconombank
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PFI: SME finance for innovation, modernization,
and energy efficiency
Input of KfW (on behalf of the German Federal Ministry for Foreign Affairs)
In the course of the Russian-German Interstate
Summit Consultations in Moscow on November 16, 2012,
KfW and Vnesheconombank signed a Credit Agreement (CA)
on Extending 110 million US dollars to Vnesheconombank.
The CA was signed by KfW Board Member Gü
ünter Braü
ünig and by Member of Vnesheconombank
Board - Deputy Chairman Mikhail Kopeikin and Deputy Chairman Alexandr Ivanov.
› Target fields: environmental protection, innovations and modernization
› Target region: North-West region of Russia
› Target entities: SMEs and PPP projects
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PFI: SME finance for innovation, modernization,
and energy efficiency
In February 2013 within the PFI the SME Bank (Vnesheconombank Group)
launched a new credit product, SMESME-Baltics,
Baltics to support SMEs, which
perform non-trading operations in Kaliningrad, Leningrad, Novgorod, Pskov
regions and in the city of St. Petersburg.
Maximum amount available to one SME is 60 million rubles,
rubles or equivalent in USD.
New line maturity – 1 to 5 years as a loan or in form of a limited credit line.
line
SME Bank provides financing to SMEs for:
› Innovation
› Modernization
› EnergyEnergy-efficient, resourceresource-saving and environmentenvironment-friendly projects.
The main goals:
goals
- promote new production processes and business models, launch new products in the Russian market, new
services (including IT, communication and engineering services), update and replace manufacturing
equipment, foster regional diversification etc.
Funds will also be allocated to support the construction of waste recycling plants in the Leningrad region,
creation and exploitation of greenhouse complexes, expansion of petroleum and dry products transportation
services, organization of biofuel production, reconstruction of a poultry farm, modernization of automotive
components production etc.
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PFI: SME finance for innovation, modernization, and
energy efficiency
Partner banks SMESME-Baltics credit product
(funded by KfW):
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AKB Investtorgbank (OJSC)
«First Republic Bank» (OJSC)
AKB «Legion» (OJSC)
KB «Intercommerz» (OJSC)
Total credit allocated in connection with the SMESME-Baltics based credit product as of May 29, 2013 was
US$37 million
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PFI: SME finance for innovation, modernization,
and energy efficiency – Case study
OOO Pilirgim
OOO Piligrim was founded in 1995. The main activity – is manufacturing
of outdoor clothes,
clothes with a small share at the highly competitive textile
market. 50 employees.
Product range includes clothing and personal protective equipment.
In April 2013 OOO Piligrim obtained a loan under the SMESME-Baltics
program :
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Amount of loan - 5 000 000 (Five million) rubles
Term - 18 months
Interest rate – 14,25% p.a.
Purpose of the credit – modernization (changes
in production processes to meet growing
scale of production).
Credit security – pledge of goods and materials,, guarantees by the
Foundation for promotion of SME credit, and the business owners.
Loan funds used to acquire new materials to expand the product range
that will allow it to increase sales in the short run.
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PFI: SME finance for innovation, modernization,
and energy efficiency – Case study
OOO „Firebird“
OOO “Zhar-Ptitsa” (“Firebird”) was registered as a limited liability
company in January 2011. Equipment rental is the main activity of
the enterprise. At the moment there are three employees in the
“Firebird", but it also attracts part time students (up to 3 people) on
a seasonal basis.
In April 2013 OOO Zhar-Ptitsa obtained a loan under the SMESMEBaltics program on the following terms:
•Amount of loan - 400 000 (Four hundred thousand) rubles
•Term - 12 months
•Interest rate – 14 % p.a.
Purpose – to improve the company’s existing offering to the service
sector (acquisition
acquisition of new equipment);
equipment
Credit security – pledge of equipment, guarantees by the Foundation
for Promotion of SME credit, and the business owners.
The loan was used to acquire new tourist equipment that should
allow the improvement of museum guider and tour services for St.
Petersburg city residents and visitors.
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PFI: PPP Projects
KfW input (on behalf of the German Federal Ministry for Foreign Affairs)
On December 20, 2012 the KfW and the Vnesheconombank with the assistance of the Council of
the Baltic Sea States (CBSS) entered into the 2. commercial agreement under the PFI.
Credit facilities under the credit agreement in the amount of up to 65 million US dollars will be
provided in the ruble equivalent at a fixed rate. The raised credit facilities are to be used by
Vnesheconombank to fund the project aimed at processing mixed household waste of
Saint Petersburg. The project is being implemented by OJSC Autopark №1 Spetstrans.
This project’s implementation with contribute to environmental protection and improving the
ecological situation in St. Petersburg.
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PFI: PPP Projects
Challenge
• St. Petersburg is Russia’s second largest city. Swift rapid growth economic
development, which poses considerable challenges for the
urban infrastructure.
• Only 20% of the solid waste in the city is treated, 80% is dumped in landfills.
The landfills are overloaded.
• In addition, there is no separate waste collection in St. Petersburg as well
as no special collection of hazard waste from private households.
Solution
• Organisation PPP project to build 9 highly automated solid
waste treatment facilities in St. Petersburg to produce:
• combustibles for cement industry
• biological waste separated for compost
• inert materials to rehabilitate landfills
Effects
• Treatment of up to 80% of the solid waste
• Volume reduction of solid waste to bury in the landfills ( down to 20%)
• Substitution of natural gas in the cement industry with combustibles from
recycled waste
• CO2 – Equivalent emissions’ reduced by separation of biological waste
Input of KfW
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Loan agreement with Vnesheconombank for USD 65 Mio.
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PFI: NonNon-financial cooperation
› International Conference "Fostering Small and Medium Enterprises (SMEs) in the
Baltic Sea Region: Financing, Public Private Partnership, Innovations“
› Date:
Date November 22, 2012
› Place:
Place Kaliningrad
› CoCo-organizers:
organizers KfW on behalf of Federal Ministry
of Finance, VEB/MSP Bank, Secretariat of the CBSS
› Main objective:
objective to focus attention of the small and medium business, financial
institutions and authorities on long–term financing and support to SMEs in the sphere
of modernization and innovation in the Baltic Sea region.
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PFI: NonNon-financial cooperation
› Meeting of the Committee of the Senior Officials Moscow September 1919-20, 2012
› Conference of the Heads of the Baltic Sea states on environmental protection (Baltic Sea
Summit) St. Petersburg April 55-6, 2013
› Round Table “Financing Energy Solutions in Kaliningrad Oblast” under EUEU-financed
RENSOL program Kaliningrad June 4, 2013
› Publications:
› Leaflets on aspects of PFI
› Leaflets on St. Petersburg PPP project
› Leaflet on SME support program
Main aim:
aim to attract other IFIs (principally NIB, NEFCO, EBRD etc.) to participate in the PFI.
Negotiations with NIB are on-going now.
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International Fund to Promote Entrepreneurial Activity
In the course of the Russian-German Interstate
Summit Consultations on November 16, 2012
in Moscow in the presence of Russian President
Vladimir Putin and German Chancellor Angela
Merkel, KfW and Vnesheconombank entered
into a MoUto Establish an International Fund
to Promote Entrepreneurial Activity.
Activity
The MoU was signed by KfW Board Member Günter Braünig and by Vnesheconombank
Chairman Vladimir Dmitriev .
Core objective of the Fund: to expand the range of existing instruments for funding SMEs
in Russia through raising long-term foreign investments.
Vnesheconombank and KfW intend to contribute USD 150 million each to the Fund. The
Fund’s amount is expected to reach USD 900 million in the coming 4 years.
The Fund is to provide support for SMEs through target financing of Russian banks,
banks as
well as through direct financing of dynamically advancing SMEs implementing
investment projects in the non-trade sector with a financing volume from 150 million to 1
billion rubles.
rubles
The Fund is scheduled to start operating within a year since the signing of the MoU.
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ClimateClimate-Friendly Economic Activity in Russia
Northern Dimension Environmental Partnership (NDEP) –
(in preparation)
Problem
• Northwest Russia, in particular the area around the Baltic Sea and the Barents Sea is at risk
due to environmental degradation, eutrophication and pollution of the flora, water and soil.
Outdated municipal supply systems in need of modernisation play a major role in this.
Approach
• NDEP is a partner initiative by the EU, Russia and
a number of other European partners to protect the
environment in the project region on a long-term basis.
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KfW has been a member of NDEP since the end of 2011.
Impacts
• Reduction in environmental impacts brought about by municipal
services
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Increase in energy efficiency
Decrease in emissions of greenhouse gases
Contribution of KfW
• Assured financing for high-priority investment projects
in the field of municipal infrastructure
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Geographical area covered by NDEP
Advice for regional and urban decision makers on preparing,
implementing and monitoring the investment projects
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ClimateClimate-Friendly Municipal Infrastructure in Russia:
IKI+ (in preparation)
Problem
• Municipal infrastructure accounts for over 20% of total emissions
of greenhouse gases, making it a key polluter and therefore a
major factor in Russia's climate issues
Approach
• Need-oriented program for modernization of municipal infrastructure
• Primary focus on drinking water supply, sanitation,
waste
management
Impacts
• Increased energy efficiency in municipal infrastructure
• Reduction in greenhouse gas emissions caused by municipal
infrastructure
• Contribution to sustainable, environmentally friendly planning
of municipal services
Contribution of KfW (on behalf of BMU and International Climate Initiative/IKI)
• Assurance of financing for high-priority investment projects in the field of municipal infrastructure
• Component for providing advice to regional and urban decision makers regarding preparation,
implementation and monitoring of investment projects
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ClimateClimate-Friendly Municipal Infrastructure in Russia:
IKI+ (in preparation)
In the course of the International Conference “Sustainable
Growth through Long-Term Investments” KfW Banking Group
and Vnesheconombank signed a Memorandum of Understanding.
The Memorandum is designed to promote the development of the
solid waste utilization sector in the Russian Federation based on
the principles of environmental protection and increased ecology levels.
On behalf of KfW Banking Group the Memorandum was signed by Chief Executive Director Ulrich
Schröder and on behalf of Vnesheconombank - by Chairman Vladimir Dmitriev.
The parties agreed to launch an Initiative on Modernizing Social Infrastructure. The Initiative will
focus on investing funds in upgrading existing and/or building new urban and regional waste
treatment systems.
Public companies and companies established on the principles of public private partnership (PPP) at
municipal and regional levels are to become final beneficiaries. A mechanism for selecting projects
as part of the Initiative is to be additionally agreed upon by the parties.
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ClimateClimate-Friendly Economic Activity in Russia Introduction
of Best Available Technologies (in preparation)
Problem
• The Russian economy is the world's fourth largest emitter
of greenhouse gases, which gives it substantial untapped
potential to sustainably reduce impacts harmful to the climate.
This is due largely to the use of inefficient and outdated
industrial technologies.
Approach
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Need-based program for the pilot introduction of best available technologies in
the Russian economy
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Establishment of a tailored innovation program for identifying, selecting,
implementing and monitoring investment projects
Impacts
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Reduction in greenhouse gas emissions produced by the Russian economy
Efficient use of raw materials in industrial processes
Contribution of KfW (on behalf of BMU and German Climate Technology Initiative/DKTI)
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Assistance for Russian Ministry for the Environment and other Russian partners with
introducing innovative technologies
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Support for the Russian economy with the introduction and proper and
sustainable operation of modern, low-emitting technologies and processes
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Financing agriculture value chains (in preparation)
Core objectives of the program
› Strengthening of SMEs and added value generators
› Support of the transformation processes in Russian
agricultural sector in order to build an efficient, competitive,
demand- and service-oriented market segment.
Approach
› KfW to act on behalf of the Federal Ministry of Foods, Agriculture and Consumer Protection.
› Main Russian national partner to be Vnesheconombank: negotiations on the amount and
form of collaboration in the program are on-going now.
› It is expected, that the program will be implemented through MSP Bank (VEB Group) and
diverse other Russian banks
Contribution of KfW
› Program volume is min. EUR 50 million.
› Financing tool: development credits combined with technical assistance measures (max.
EUR 1 million).
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Financing public health services (in preparation)
Background
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The MoU between Federal Ministry for Health (Germany) and Federal Ministry for Health and
Social Development (Russia) was signed in Jekaterinburg, Russia, on July 15, 2010.
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Core areas of the collaboration are:
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Prevention of diseases (public health)
Mother and child
Virulent diseases
e-Health
Contribution of KfW
• Acquisition and appraisal of possible projects in the public health sphere: negotiation with
the German firms acting in this field (AJZ Engineering, Siemens Health)
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Protection of Forests, the Climate and Biodiversity
in Russia's Far East
Problem
• Destruction of forests with a high level of biodiversity due to
non-sustainable and often illegal timber extraction and fires
• Poaching of endangered species, in particular Amur tigers
• Endangerment of the livelihood of the indigenous population
Approach
• Establishment and management of conservation areas and
conservation concessions
• Promotion of sustainable forestry (FSC)
• Carbon dioxide financing: REDD-like approach in the compliance
market (JI)
• Promotion for marketing of non-timber forest products (NTFP)
Impacts
• Savings of 500,000 t of CO2 eq annually and conservation of over
1 million h of forestland
• Sustainable financing for forest protection and sustainable use of
forests (FSC): marketing of carbon credits and NTFP
• Preservation of the traditional way of life of the indigenous
population
Contribution of FC
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Provision of grant funds (in total approx. EUR 6.6 million)
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Rewetting of Peatlands
in Belarus, Russia and Ukraine
Problem
• Release of large quantities of greenhouse gases due to
draining of peatlands
• Loss of biodiversity
• Release of additional CO2 due to fires
Approach
• Rewetting of peatlands
• Establishment of a carbon dioxide financing scheme based on
peatland rewetting
• Incentives for local population through sustainable use of
biomass from rewetted areas
Impacts
• Rewetting and management of approx. 70,000 h of peatlands
and restoration of the unique biodiversity
• Emissions savings of 1.7-8 t of CO2/h/year (depending on the
location)
• Prevention of fires
Contribution of FC
• Support through provision of grant funds (in total approx. EUR
13.1 million)
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Thank you for your attention
Ekaterina Galitsyna, Senior Project Officer
katja.galizina@kfw.de
Irina Korolenko, Project Officer
irina.korolenko@kfw.de
KfW Representation Office
tel.: +7 495 514 10 81
Russian Federation
fax: +7 495 514 10 83
119180, Moscow
1. Golutvinski pereulok, 1
Thema der Präsentation / Ort / Datum [TT. Monat Jahr]
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