Investments in Russia's Energy Saving Programs Will Pay off Fast (Summary)

by Nikita Suslov

Russia has some of the largest energy-saving potential in the world. Russian experts estimate that transition to new technologies and implementation of energy-saving programs may conserve about 40% (or no less than $30-40 billion) of presently available energy resources.

Until now, the energy component in production has declined only through increasing the scale of production. Despite negative trends, Russia today seems on the right track to achieving energy-saving targets. Privatization in the Russian economy is promoting the development of resource-saving strategies since energy prices have rapidly increased, even approaching world prices in recent years.

The federal budget covers more than a quarter of total costs for carrying out energy-saving projects and measures. International financial organizations and institutions are showing a great interest in these projects: The World Bank has already given a $106 million credit for reconstructing gas-distribution nets. However, the attraction of private investments (including foreign) can become the crucial factor in financing Russia's energy-saving sector. The interest for the investor is clear: investment in fuel and energy-saving projects now pays off in six months to a year and a half.