Center-invest Bank is the first bank in southern Russia to provide loans for homeowners’ associations to renovate apartment buildings and reduce energy consumption. The bank presented its unique experience in this area at a seminar in Krasnodar on “The Practicalities of Energy Efficiency Modernisation of Multifamily Residential Buildings”. The event was organised by the RuSEFF “Warm Life” programme.

Under the Russian Law on Capital Repairs, the owners of apartments in multifamily residential buildings have to pay monthly contributions to a capital repairs fund. This fund is used to renovate buildings in accordance with a regional capital repairs programme. This means that residents may have to wait ten to twenty years until their building is due for renovation. However, with a loan from Center-invest Bank, homeowners’ associations can carry out energy efficient renovations straightaway.

To obtain a loan, a homeowners’ association sets up a capital repairs fund in a dedicated bank account. There are no extra costs for the residents: they pay the same contributions for capital repairs as before, but now the money goes towards the loan repayments. The energy savings achieved by the building renovation help to pay off the loan.

“The regional capital repairs programme is convenient when a building is very old and is in urgent need of renovation,” said Alexei Rashevsky, manager of Center-invest Bank’s main branch in Krasnodar. “However, it is not advantageous to pay into a regional capital repairs fund for years on end, as these savings will be “eaten up” by inflation.

The most important outcome of Center-invest Bank’s work in the housing and communal services (utilities) sector is that many of southern Russia’s residents now live in more comfortable, warmer buildings. Since 2007, through its loan programmes, the bank has invested more than RUB3bn in improving the sector. Both individual homeowners and entire buildings, represented by a homeowners’ association, can take out a loan. More than 70 multifamily residential buildings have been renovated thanks to finance from Center-invest Bank. More than 12,000 families have used a Center-invest Bank energy efficiency loan to improve the energy performance of their homes. The interest rate on these loans is lower than for standard retail loans.