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$160mn to cut Russian chemical firm’s energy use
Ammonia maker TogliattiAzot to reduce CO2 emissions by 500,000 tonnes/year
One of Russia’s largest industrial consumers of natural gas is going to cut
its energy consumption by 20 per cent and lower its carbon dioxide emissions
using a $160 million loan from the EBRD.
EBRD First Vice President Noreen Doyle today signed the EBRD’s largest-ever
loan for energy efficiency improvements at the TogliattiAzot chemical plant in
Russia. It produces ammonia and urea, used as fertiliser, plus methanol and
other chemicals. This is the Bank’s second loan to the company; the first was
signed in 2001.
TogliattiAzot consumes 1 per cent of Russia’s domestic natural gas supply,
using it both as fuel and feedstock to produce ammonia, the company’s main
product. TogliattiAzot President Vladimir Makhlai said the company will use
the loan to repair and modernise four ammonia production units. At current gas
prices Mr Makhlai estimated the firm will save $20 million a year in gas costs
after the energy efficiency improvements are realised.
The gas savings each year will be roughly equivalent to one month’s supply of
gas for Switzerland or Greece, Ms Doyle said. Furthermore it is estimated the
plant will reduce its carbon dioxide emissions on current production by
500,000 tonnes per year. These emissions reductions may eventually be
translated into carbon credits that could be sold under the Kyoto Protocol.
The loan benefits from an energy efficiency audit conducted last year using
€30,000 in grant funding provided by the Government of the Netherlands.
Ms Doyle noted energy efficiency investments account for about 13 per cent of
new EBRD investments in Russia in 2004. Of the $160 million loan to
TogliattiAzot, $60 million has been underwritten by Austria’s Raiffeisen Bank.
Located on the south Volga River, TogliattiAzot is the largest ammonia
producer in the former Soviet Union. The company was started in the 1970s as a
venture of the American entrepreneur Armand Hammer. It was privatised in 1992
and is owned locally.
The principal market for TogliattiAzot ammonia is the US, although demand is
also growing in China.
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