On 24October the European Bank for Reconstruction and Development (EBRD) signed anagreement granting the district heating company Teploenergo (Taganrog) a ten-year RUR221m loan to upgradethe city's heating infrastructure.

As part of the project, Teploenergo plans toreconstruct and replace boilers, acquire combined heat and power units, andinstall individual heating systems. This will allow the company to reduce itscurrent fuel consumption by 4% and save 1.1GWh of electricity per every10.4GWh. An annual CO2 reduction of 6,800 tonnes is anticipated.

“The EBRD is willing to provide long-term finance, inaddition to its 2007 shareholder investment, for this excellent example of aproject,” said Jean-Patrick Marquet, Director of the EBRD's Municipal andEnvironmental Infrastructure Team. “What is particularly special about thisproject is that, as well as making the company more economically efficient, itwill have an almost immediate impact in terms of conserving energy resourcesand improving the environmental situation.”

In the last four years, Teploenergo has constructedand commissioned four new boiler rooms and dismantled 16 old, unprofitableones. It plans to have started up another three boiler rooms by the end of 2008. In parallel, thecompany is reconstructing and replacing heat distribution networks. This hasallowed it to reduce threefold the per unit cost of producing heat, to automatethe control system, and to improve the quality of its services. Teploenergosupplies 57% of Taganrog'sheat and 75% of its hot water.

This long-term loan will enable the company toimplement its new strategy. The signing of the loan agreement is further proofthat, despite the global economic crisis, Center-invest Bank's customers arecontinuing to successfully develop their businesses.

The EBRD bought an equity stake in Teploenergo in December 2007. This was thefirst time that the EBRD had become a shareholder in a Russian heating company.

Teploenergo was one of the first private municipalheating companies in Russia.The EBRD has a 25% stake in the company, and Center-invest Bank a 47% stake.

Center-invest was the first bank in Russia to participate in the EBRD's 'SustainableEnergy Initiative in Russia'.Center-invest's energy efficiency loan portfolio has reached RUR1bn. 

In 2007 Teploenergo was arunner-up in the prestigious, international, sustainable developmentcompetition, the FT Environmental Awards, launched by The Financial Times andCiti Private Bank. As the competition organisers pointed out, Teploenergo wasthe only Russian company to enter the competition.

Together, Teploenergo andCenter-invest Bank have shown the Russian business community that sustainable,energy efficient and environmentally friendly development can benefit not onlysociety, but also a company's bottom line.

Telpoenergo'sproducts and services:

• hot water and heating
• maintenance of equipment and heatdistribution networks
• designing and constructing boilerrooms and heat distribution networks (100% subsidiary company Teplostroi)
• managing housing stock (100%subsidiary company Zodchii)
• installed capacity – 309.3Gcal/hour; connected load – 225.9 Gcal/hour.