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                                                                             LONG-TERM PARTNERSHIPS WITH EMERGING PLAYERS



                                           Russia: Energy Efficiency and Cleaner Production
                                           for Natural Gas Company

You cannot see, smell or touch some air components such as nitrogen. And yet, they are critical components in the
production of fertilizers, plastics and synthetic fibers. Russia’s vast natural gas resources make it ideal for chemical
companies operating in this sector, an advantage that can help spur economic development and job creation.

And yet, it is an energy-intensive industry with a history of emissions issues. With IFC’s help, strong environmental
commitment of local Russian company KuibyshevAzot, this is starting to change.

                                                                             KuAz, a long-time IFC client, has embarked on an ambitious,
                                                                             $39.6 million plan to upgrade its manufacturing facilities,
                                                                             improve the energy efficiency of its operations and
                                                                             substantially reduce its greenhouse gas emissions. The
                                                                             anticipated result: lower operating costs, better profit
                                                                             margins and enhanced competitiveness.

                                                                             IFC’s $20 million clean production loan is supporting these
                                                                             efforts. The deal was initiated in 2009, at the height of the
                                                                             global financial crisis, at a time when credit markets were
                                                                             frozen and there was little investor enthusiasm for projects
                                                                             in emerging markets. In fact, without IFC’s strong support
                                                                             and financing the project might not have moved forward.

The company, based in Togliatti, Samara, produces ammonia and nitrogen fertilizers and caprolactam, a raw material
for synthetic fibers, engineering plastics and cord fabric, among others.

Of note, the company’s ability to expand its export base and increase access to affordable, quality fertilizers that help
farm crops grow will make a direct difference in the lives of millions, especially in famine-prone countries that rely on
agriculture to feed their people.


 IFC role and additionality
  •        $20 million clean production loan toward $39.6 million project costs
  •        Guidance: to identify areas of focus for upgrades
  •        Annual energy savings: 41 Gwatt hours; 4.7 million cubic meters of natural gas; 362,360 Gcal of heat
  •        Greenhouse gas emissions reduction: estimated at 115,432 tons of CO2 equivalent each year, equal to
           taking 23,000 cars off the road each year
  •        Job retention: efforts will enhance the company’s competitiveness so that it can maintain its 5,000-strong
           workforce in a region where unemployment is rising


                                      For more information about IFC’s chemicals industry sector, please contact:
                                            Anil Chandramani, 1-202-473-4081 or achandramani@ifc.org
                                                  Kremena Tenev, 1-202-458-5466 or ktenev@ifc.org

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 managed commercial forests
 ifc.org                                                              2011