06.09.2016

State Duma calls for using long-term factoring to improve energy efficiency

On 8 June 2016, State Duma held an expanded Energy Committee meeting to discuss long term factoring instruments to finance energy-saving measures. The meeting was attended by representatives of major energy businesses, federal authorities, industry experts, and financial institutions.

Following discussion about the prospects of the Russian energy efficiency market as well as existing practices of implementing energy-efficient technologies, the Committee made recommendations on how best to implement government policy to make the Russian economy more energy efficient. In particular, the Committee members and experts focused on extra-budgetary financing of energy-saving technologies, including factoring.

Chairman of the State Duma Energy Committee Pavel Zavalny said; "Making the Russian economy more energy-efficient is a government priority. Financing remains the key obstacle to the effective implementation of energy-saving technologies across various industries, including the energy sector. Factoring is a new financial mechanism that can boost the energy efficiency of the Russian economy."

CEO of VTB Factoring Anton Musatov said; "In late 2015, VTB Group senior management launched a new line of business – financing energy-efficiency measures through long-term factoring arrangements. Using this financing tool, customers can implement such measures without making an initial investment and pay for the modernisation with energy savings made during the term of the energy service contract. The existing VTB Factoring programme already makes it possible to finance energy conservation and energy efficiency practices that can be measured in hundreds of billions of roubles."