Technical-economic and geographical opportunities for energy efficiency and renewable energy in Russia are enormous - cost-effective investments are possible in district heating systems, buildings, and industry, and for wind, biomass, solar and geothermal energy. Market-level energy prices, privatization, and the possibility of independent power production all favor investments in these technologies and technology transfer with other countries. But many transaction barriers limit such investments and transfers, especially barriers that are related to capital, information, infrastructure, market institutions, human resource capabilities, and institutional incentives. Market intermediation and joint ventures are important in overcoming these transaction barriers. International policies, for example by bilateral and multilateral agencies, should facilitate market intermediation. Capacity building should target skills in economic analysis, management, and finance; information services; regulatory development; new market intermediation institutions; stronger legal and market institutions; and implementation mechanisms supporting independent power producers. Policies that encourage and support energy service companies are especially important.