Sakhalin-1 Consortium and USAID Form Alliance to Help Small Businesses Succeed in North Sakhalin Island, Russia
22 September, St. Petersburg -- Small businesses in the northern districts of Sakhalin Island, Russia, may soon enjoy easier access to credit, thanks to a US $1 million micro-finance program announced today at the US-Russia Commercial Energy Summit by ExxonMobil, on behalf of the Sakhalin-1 Project Consortium, and the US Agency for International Development.An ExxonMobil subsidiary, Exxon Neftegas Limited (ENL), is the operator for the Sakhalin-1 Consortium, an offshore oil and gas project in the Russian Far East. The Sakhalin-1 Consortium members, ENL, SODECO (Japan), Rosneft (RN-Astra) and its subsidiary Sakhalinmorneftegaz-Shelf (Russia), and ONGC-Videsh (India) are to provide loan capital to expand an existing USAID micro-finance program into northern Sakhalin districts of Nogliki and Okha, where the Consortium's construction activities are located.
"As you know, for every direct job in the oil industry, there are four or five indirect jobs in service and related areas, where small businesses are truly competitive," said Rex Tillerson, Senior Vice President of Exxon Mobil Corporation. "Our aim is to help the local community capture more of the benefits of economic development from our investments in the oil and gas sector by working with USAID to give the best entrepreneurs in the northern Sakhalin districts a hand-up, not a hand-out."
According to the USAID Russia Mission, the three-year program will provide business training and financing to those who have no collateral yet for conventional bank loans, using innovative peer group lending techniques pioneered on the island by USAID's contractor ACDI/VOCA. With the Sakhalin-1 grant, the program should reach self-sustainability in a few years and continue to provide small-business financing for years to come.
US Ambassador to Russia Alexander Vershbow praised today's announcement as "an innovative public-private partnership that will enhance opportunities for countless average citizens in northern Sakhalin. It is truly in the spirit of the new Global Development Alliance business model announced by Secretary Powell and USAID Administrator Natsios."
With an estimated $12 billion in capital investment over all phases, Sakhalin-1 is one of the largest foreign investment projects in Russia.