Romania Gears Up for a Greener Future: Lara Tassan Zanin (EIB) Unveils Ambitious Sustainability Drive

Speaking at Business Review’s recent Environmental & Sustainability Summit, Lara Tassan Zanin, the Head of the European Investment Bank Group Office in Romania, has announced that the EIB is committed to mobilizing a significant amount of investment, EUR 1 trillion, in climate-related projects by 2030. Speaking on the bank’s ambitious goals, Ms. Zanin unveiled a multi-pronged strategy aimed at making a significant impact on green initiatives across Europe.

One of the pivotal elements of this strategy is a promise that at least 50% of the EIB’s annual high plan will be dedicated to green projects. This commitment demonstrates the EIB’s resolute intention to prioritize environmentally responsible initiatives and, as EU’s climate bank, the EIB has a strong track record of aligning its financing activities with the Paris Agreement’s goals, emphasizing the institution’s role in advancing the world’s sustainable growth objectives.

In Romania, the EIB has provided funding for various projects and has also supported green business transport, helping the country’s largest mobility service provider acquire an electric and hybrid car fleet. Additionally, the EIB is supporting a private sector company with a EUR 9 million loan for afforestation and forest management, promoting responsible and sustainable forest resource use.

“One of the EIB Group’s key initiatives has been committing to align all our financing activities with the goals of the Paris Agreement from the end of 2020. As the EU’s climate bank, we are reaffirming our strong commitment to playing a leading role in mobilising the finance needed to achieve the sustainable growth goals set in this worldwide agreement. In Romania, the Bank has financed the retrofit of public and residential buildings, significantly reducing energy consumption and CO2 emissions. Also, the EIB backed green business transport by enabling the country’s largest mobility service provider to acquire an electric and hybrid car fleet. This year we are supporting for the first time a private sector company with a EUR 9 million loan for afforestation and forest management. This will ensure the long-term ecological, social and economic viability of forests, thanks to a responsible and balanced use of forest resources, while maintaining the integrity of the local ecosystems. The examples go on – in renewable energy, energy efficiency, sustainable transport, water and sanitation, forestation and agriculture, and more!” Says Lara Tassan Zanin.

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Country-specific Challenges

Although the requirement for 50% green projects is a central pillar of her strategy, Ms. Zanin acknowledged that this requirement cannot be implemented uniformly in all countries. Recognizing the different challenges faced by different countries, Ms. Zanin pointed to the complex issues facing Romania as it transitions to a greener economy. Issues such as energy prices and interest rates necessitate a longer implementation period for the country.

“I would say that the energy price is at an interest rate crisis, so Romania, compared to other countries, has a more stretched duration of implementation.” the Head of the EIB in Romania declared.

Demand-driven Banking: Profit vs. Public Policy Goals

Ms. Zanin emphasised the EIB’s unique approach as a demand-driven bank. The institution does not proactively seek projects, but evaluates proposals from both the public and private sectors. The eligibility criteria are in line with the EIB’s policy objectives, which are primarily focused on innovation and environmental sustainability. The EIB differs from conventional financial institutions in its non-profit orientation. Rather than generating profits, it seeks to fulfill public policy objectives, with an emphasis on innovation and environmental protection. This approach ensures that investments are guided by a broader social and environmental purpose.

“We are a demand-driven bank, not a development bank, so we evaluate the projects we receive from the public and the private sector and if they are eligible according to our policy objective. We don’t pursue profit, we pursue public policy goals, among which innovation and environment, and we assess whether the projects are eligible and if they’re ultimately bankable, we support them with very convenient terms, both in terms of pricing and in terms of tenure.” Says Lara Tassan Zanin

Supportive Terms for Eligible Projects & Co-Financing

For projects that meet the strict criteria, the EIB offers highly favorable terms. These include competitive pricing and loan maturities tailored to the economic life of the projects. This is intended to complement the services offered by commercial banks and make EIB financing an attractive option for eligible projects. The EIB typically covers up to 50% of the cost of a project, leaving clients responsible for securing the remaining 50%. This can be done in various ways, e.g. by using own funds, government budgets, financial support from other commercial banks or grants.

“We link the tenure of our loan to the economic life, meaning that we are complementary to the commercial banks, we offer something more advantageous, but also, we finance up to 50% of the protocols, leaving our clients to decide how to raise the remaining 50%, either with their own resources, state budget, or with grants or loans from other commercial banks.” Ms. Zanin explains.

EIB Support for Romania: Focus on Health Projects

Ms. Zanin pointed out that the EIB provides important financial support to Romania, but it appears that our country is still working to reach the target of 50% green projects, with some basic investments still to be realized.

“In Romania, we support the country with 1 or 1.5 billion euros every year, but we are not meeting the 50% requirements, yet, because Romania still has some primer investments to be delivered.” Says Lara Tassan Zanin.

Over the past year and a hlaf, the EIB has provided significant investments for health projects in Romania. Moreover, the financed projects also include environmentally friendly and resource-efficient features, because the EIB actively encourages the integration of energy-efficient solutions, resource-efficient practices, and waste recycling initiatives.

“In the last 18 months, we’ve financed more than 1 billion euros on health projects that are only partially green, meaning that when it comes to the hospitals we work with, we are factoring in the design, we ask the designers to include more energy-efficient solution, more resource efficient solution, to factor in waste recycle or circular economy features.” Declares the Head of the European Investment Bank Group Office in Romania.

Raising awareness for energy efficiency

A major challenge for Romania is the need to raise awareness about energy efficiency. This change is increasingly important because Romanian companies have long benefited from remarkably low energy costs, which has strengthened their competitiveness both at the European and global levels. However, as energy costs continue to rise, this advantage is becoming less and less sustainable.

“Last year, we financed 17 billion euros of clean energy all over Europe and only 70 million came to Romania, so we certainly have to accelerate the delivery of new green energy capacity in Romania, but we also need more energy efficient consciousness, meaning that households and industries in Romania need to consume less and better. We have seen a very important shift in the market in the last years, pressured by the increasing energy costs. Romanian businesses benefited from incredibly low energy costs which also made them competitive in the European market and globally, but now this is not going to be the paradigm of the future because the energy costs are increasing.” Lara Tassan Zanin concluded.

A Vision for a Greener Future

In summary, Lara Tassan Zanin’s interventions at the Environmental & Sustainability Summit 2023 highlighted the EIB’s firm commitment to addressing climate change and supporting sustainable development. The EIB’s dedication to mobilizing one trillion Euros for climate investments by 2030 positions it as a critical force for environmental progress and Ms. Zanin’s leadership serves as an inspiration for a more sustainable and environmentally conscious future in Romania, emphasizing the EIB’s pivotal role in advancing climate action and sustainable growth. The EIB’s commitment and the initiatives it supports reinforce its status as a powerful ally in the global effort to combat climate change and build a more sustainable world.