IFC Invests in UniCredit Bank to Boost Romania’s Green Transition and Climate Finance Market

Romania faces significant climate challenges, including an energy intensity that remains over 60 percent higher than the EU average, despite a 30 percent reduction over the past decade.

The International Finance Corporation (IFC) has made a landmark investment in the senior bonds issued by UniCredit Bank S.A., the Romanian subsidiary of UniCredit S.p.A., marking the first tranche of a €108 million investment under the bank’s Euro Medium Term Notes Programme. This strategic investment is aimed at expanding access to green loans for small and medium enterprises (SMEs) and individuals, including women, to strengthen Romania’s climate finance market and support its transition to a more sustainable, green economy.

Tackling Romania’s Energy Intensity and Greenhouse Gas Emissions

Romania faces significant climate challenges, including an energy intensity that remains over 60 percent higher than the EU average, despite a 30 percent reduction over the past decade. While the country has committed to increasing its renewable energy consumption to 30.7 percent by 2030, substantial challenges remain in reducing greenhouse gas (GHG) emissions, particularly in the energy and housing sectors, which together contribute significantly to the nation’s emissions.

This new IFC investment seeks to address these challenges by promoting the growth of climate finance within Romania, focusing on providing green loans to both SMEs and individuals. 50 percent of the investment will be allocated to green loans for SMEs, while the other half will fund green housing loans, including mortgages and home renovation loans, with a strong emphasis on supporting women’s access to financing. Specifically, at least half of the green housing loans will be earmarked for women, helping to promote gender equality in the green transition.

Strengthening Romania’s Emerging Climate Finance Market

This investment is part of IFC’s broader efforts to strengthen Romania’s emerging climate finance market, fostering competition and encouraging replication by other financial institutions. By facilitating access to green finance for businesses and homeowners, IFC aims to stimulate Romania’s efforts in transitioning to a low-carbon economy, in line with Romania’s decarbonization targets.

The 2023 World Bank Group Romania Country Climate and Development Report (CCDR) reveals that Romania needs a total investment of $356 billion to achieve net-zero emissions by 2050, with an estimated two-thirds of these funds expected to come from the private sector. In alignment with these projections, IFC’s investment will play a crucial role in mobilizing private capital to support Romania’s transition towards sustainability.

IFC’s Ongoing Commitment to Romania’s Green Transition

With a $2.1 billion portfolio in Romania, IFC is the country’s largest international financier and its ninth-largest globally. This latest investment aligns with IFC’s mission to support countries in addressing their climate-related challenges and transitioning to a sustainable future.

By partnering with UniCredit Bank, the IFC is leveraging the bank’s expertise and infrastructure to increase the availability of green loans, supporting businesses and individuals in Romania as they invest in renewable energy, energy-efficient buildings, and sustainable practices.

The investment comes at a crucial time for Romania, which is making significant strides towards meeting its climate goals. With increasing demand for green financing options, this initiative is expected to stimulate Romania’s green economy, helping reduce emissions while boosting the country’s resilience to climate change.

A Step Towards Net-Zero Emissions by 2050

Romania’s push to reduce its GHG emissions and transition to a low-carbon economy aligns with broader EU goals of achieving net-zero emissions by 2050. With private sector investment playing a central role in achieving these targets, IFC’s €108 million investment is expected to provide much-needed support for Romania’s green financing initiatives, particularly in the SME sector and the housing market. By addressing climate finance gaps, this partnership is helping to ensure Romania’s success in its green transition while fostering broader regional economic sustainability. 4o mini  You said: