ROMANIA: IFC Boosts Romania’s Green Transition with Two Key Projects
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In his first visit to Romania this week, IFC’s Managing Director Makhtar Diop announced two major deals aimed at catalyzing the country’s green transition, boosting financial inclusion, and driving sustainable growth.
IFC is partnering with leading Romanian bank BRD Groupe Societe Generale for a landmark synthetic significant risk transfer (SRT) transaction in which IFC will provide a risk guarantee on an up to €700 million BRD portfolio of small and medium enterprise and corporate loans. Capital freed up by the SRT—the first for both IFC and BRD in Romania—will enable the bank to lend up to €315 million to fund climate-related initiatives and women-owned smaller businesses.
SRTs are a widely used capital management tool at European and now North American banks. IFC has played a key role in their introduction in emerging markets, including in Central and Eastern Europe. Capital resources freed up by such transactions can be reallocated toward financing projects with strong developmental impact.
IFC is also providing a green loan of approximately €300 million to Warehouses De Pauw NV (WDP), a Belgian real estate investment trust, to expand its portfolio of green, energy-efficient semi-industrial and logistics assets across Romania. The financing includes sustainability-linked features,incentivizing the WDP to further enhance its climate agenda by increasing the percentage of EDGE (Excellence in Design for Greater Efficiencies) certified properties and growing the roof-top installed solar panel capacity in Romania.
The loan comprises €150 million from IFC’s own account with the remainder mobilized from investors including Sumitomo Mitsui Banking Corporation. IFC also supported WDP in designing its first sustainability-linked loan under a new energy savings and emissions reduction framework.
“The projects announced today underscore IFC’s commitment to supporting Romania in unlocking the private sector’s potential to foster sustainable inclusive growth,” said Makhtar Diop, IFC’s Managing Director. “By leveraging innovative financing tools and partnering with the government and the private sector, we aim to enhance the country’s business infrastructure, boost climate initiatives, and provide new opportunities for women-owned smaller businesses.”
“I was delighted to meet IFC Managing Director, Makhtar Diop, and engage in a constructive discussion on the priorities going forward and the importance of a successful green transition,” said Marcel Ciolacu, Prime Minister of Romania. “I look forward to continuing the dialogue and building our cooperation to ensure Romania is on the pathway to green, sustainable and inclusive growth.”
Investment needs for Romania’s green transition are two times higher than in other European countries (7 percent of GDP per year compared to an average of 4 percent), with just 1.6 percent of bank loans currently allocated to green projects.
Romania represents IFC’s largest country exposure in Europe, with a portfolio of $2.1 billion, and its 10th largest globally with over $7 billion invested across sectors since 1991. IFC’s commitments this fiscal year currently amount to a record $1.5 billion, including $1.1 billion in mobilization, complemented by targeted advisory support to spur the green transition.
IFC supported a first wave of privatizations and new concessions in telecoms, banking, and manufacturing, when access to international financial markets was scarce. It also structured the first water public-private partnership project in the country, dramatically improving water access in Bucharest. IFC initiated or participated in a series of first innovative financial instruments enabling capital to flow into important sectors, including climate, water, housing, smaller businesses, and social inclusion.
