IFC investment to boost access to finance for green housing in Romania

A new IFC investment in UniCredit Bank S.A. (UCB) senior bonds issuances, representing a part from the total of $80 million approved amount in relation to UniCredit Bank’s Euro Medium Term Notes Programme, will help increase access to finance for green housing in Romania, including green mortgages and green home improvement loans, supporting the country’s climate goals.

In Romania, access to housing finance is still limited, and IFC’s financing will help develop the green housing loan market. The residential housing market lags in green certifications while green housing finance is still at an early stage of growth. With IFC’s support and global expertise, UCB will be able to develop internal capacity and ramp-up the share of green housing in its overall portfolio.

According to estimates, over 95 percent of the buildings constructed before 2010 require energy-efficient refurbishing. To support the country’s efforts to move towards a more sustainable future, the entire proceeds of IFC’s bond investment will be used for green housing products while also helping reduce greenhouse-gas emissions.

“We are very pleased to partner with IFC once again, through the investment made in our senior bonds` issuance,” said Răsvan Radu, CEO of UniCredit Bank. “This particular investment is meant to increase the access of our customers to more affordable green financing – particularly green mortgage, one of our retail flagship products. As a leading bank, with sustainability at the core of our DNA, constant growth of our green financing portfolio and support for customers’ transition to a greener, more sustainable future are among our main priorities.”

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Development of the green mortgage segment is especially important in Romania as households accounted for about 33 percent of the total final energy consumption in 2018. Therefore, improving energy efficiency in the residential sector will make an important contribution to climate mitigation.

“It’s crucial that we expand the country’s pool of mortgage financing, including loans that allow people to purchase more environmentally friendly homes,” said Ary Naïm, IFC’s Regional Manager for Central and Southeast Europe. “We expect that this program will demonstrate a growing opportunity in this space, stimulating other banks to introduce or improve their green mortgage products in the country.”

IFC will provide internal knowledge and capacity on the green buildings’ certification schemes, concept of green mortgages, as well as introducing IFC’s own Excellence in Design for Greater Efficiencies (EDGE) platform for the green buildings’ certification.