IFC Partners with Raiffeisen Bank to boost sustainable growth in Romania

To help diversify financial products for green and inclusive finance in Romania, IFC has invested €50.8 million in a bond issued by Raiffeisen Bank S.A. (RBRO), a member of the Raiffeisen banking group—the bank’s first EUR-denominated international bond issuance under its sustainability bond framework.

The proceeds from the bond will be used to finance climate projects, including loans and credit lines for green mortgages, energy efficiency, renewable energy, sustainable agri-finance, and clean transport; as well as social activities, such as healthcare, education, basic infrastructure, affordable housing, and employment generation.

“We greatly appreciate the trust granted by both foreign and local institutional investors through their participation in our inaugural Eurobond issuance. The interest shown by the capital market reaffirms, once again, that our banking model is a responsible one, characterized by strong financial standing and an ongoing commitment to incorporate the perspectives of all relevant stakeholders,” said Alina Rus, RBRO`s CFO. “Furthermore, we are delighted of the long-term partnership with IFC and its strong support for our commitment to fostering a sustainable and inclusive development of the Romanian economy.”

The bond is also expected to qualify for the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) imposed under the European Union’s Banking Recovery and Resolution Directive. The regulatory requirement ensures that banks have sufficient capacity to absorb losses and avoid taxpayer-funded bailouts.

“In the years to come Romania’s economy has the potential to continue converging towards EU standard of living, and to also eliminate remaining social and territorial inequalities. This will require increased access to financing,” said Ary Naïm, IFC Manager for Central and South Europe. “With this operation IFC aims to continue fostering a resilient banking sector and local capital market, committed to both sustainability and inclusion.”

The financing builds on IFC’s longstanding relationship with RBRO and the Raiffeisen banking group. Previous projects include multiple investments in the bank’s bonds issuance whereby the use of proceeds was to fund green and social projects in Romania.

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.