Business Planning: A Key to Energy Efficiency in Russia

Abstract

Financing is a significant barrier to energy efficiency in Russia. Many banks and Western companies would like to invest in energy efficiency projects in Russia, but are frustrated by the lack of Western-style business planning and preparation in Russian project proposals. With support from the U.S. Department of Energy, the Pacific Northwest National Laboratory has organized several training workshops on writing business plans for energy efficiency projects. Russian project proposals typically describe the technical measures to be implemented, and they provide a simple payback analysis of the costs. The most difficult tasks for Russian business people are often developing a marketing plan, using creative financing techniques, describing the implementation plan in sufficient detail, and providing appropriate information on the organizations involved in the project. As Russians learn to prepare solid business plans, their ability to attract financing for energy efficiency projects and successfully implement such projects will increase. Business planning also provides a useful framework for assessing energy projects. In this sense, it can help Russian business people better understand the advantages of energy efficiency and increase their willingness to invest in demand-side measures.