1. Department for External Economic and International Relations of Moscow
Investment Project:
Energy Service in Street Lighting
Vakhtang Partsvaniya
Deputy Head of Foreign Economic Affairs Office
Moscow Investment Presentation in New York City, October 28, 2013

2. Energy Service Performance Contract (ESP Contract)
1
The ESP Contract is introduced into
Russian legislation by Federal Law N 261FZ (2009)
2
The ESP Contract provides a
modernization of municipal infrastructure
through investor funding
3
Local administration pays back the
investors from money saved through
energy efficiency
4
Investor repayment will be made within the
contract period (5-7 years)
The city gets
renovated municipal
infrastructure and
energy cost savings of
up to 50-70%
Department for External Economic and International Relations of Moscow
2

3. ESP Contract: General Scheme
Energy
service
company
(ESCO)
Modernization
of municipal
infrastructure
Improved
energy
efficiency
Savings in
city budget
Return payments from
energy savings
Department for External Economic and International Relations of Moscow
3

4. ESP Contract: Key Parties
Bank / Investor
Financing
2
5
3
ESCO
ESP Contract
1
Payments
4
Suppliers /
Contractors
Payments
(= savings)
Client
Department for External Economic and International Relations of Moscow
4

5. Market Segmentation
Cities
Industry
Street lighting
Lighting
Public buildings
On-site generation
Heating systems
other
Main customers
Source of repayment – energy baseline is fixed in the
city budget for the term of the ESP contract
Department for External Economic and International Relations of Moscow
5

6. Typical Problems in Street Lighting in Russian Cities
Outdated and inefficient street lights with sodium and
1 mercury lamps
Extremely high energy consumption covered by city
2 budget resources
Lack of budget funds needed for modernizing outdated
3 lighting equipment
Street lighting standards, regulations and rules are often
4 partially satisfied
Department for External Economic and International Relations of Moscow
6

7. Market Potential in Russia
13 cities
population
> 1M
24 cities
0.5 – 1M
37 cities 0.25 – 0.5M
Market
potential
74
Major
cities
4
Have
ESPCs
$ 500M
Department for External Economic and International Relations of Moscow
7

8. Moscow Potential
Total number of street
lights
385,000
Number of street lights
to be modernized
170,000
Moscow budget annual
energy expenses
$41M
Required investments
$60M
Energy savings (per year)
$17M
Term of contract
6 years
Future value
$100M
NPV (discount rate = 14%)
$30M
3 pilot zones in 2013
25,000 street lights
Department for External Economic and International Relations of Moscow
8

9. Pilot Zones: Installed Luminaries in the Selected Areas
Sodium
lamps:
ЖСП-70
НАТР-100
ВЕБ-150
ВЕБ-250
СППР-70
СППР-125
РКУ-125
РКУ-250
Mercury
lamps:
3 pilot zones include:
25,000 lighting points
Annual Moscow budget energy expenses
Investments in modernization
$2.7M
$5M
Energy Savings (per year)
$1.3M
Term of contract
6 years
Future value
$7.5M
Department for External Economic and International Relations of Moscow
9

10. Department for External Economic and International Relations
Address: 13, Tverskaya str., Moscow, 125032
Tel.: +7 (495) 633-68-66
Fax: +7 (495) 633-68-65
www.dvms.mos.ru
www.investinmoscow.ru
E-mail: dms@dms.mos.ru
INVEST IN MOSCOW