Stefan Manole, CEO ProCredit Bank: Green finance is a holistic approach

As climate change and its large-scale negative effects are no longer just presumptions but a reality we are all facing on a daily basis, every member of society, including those in the business environment, must behave and do business in a more sustainable way. Business Review talked to representatives of large companies in Romania and highlighted several solutions that can ensure a greener and safer future for the coming generations. Implementing sustainable urban development, water management, and farming, supporting businesses with green finance, and finding ways to lower carbon emissions in all our activities are among the actions that could be part of the solution.

BR: What is ProCredit Bank’s approach towards green finance?

Stefan Manole, CEO ProCredit Bank: For us, as a financial institution, green finance is a holistic approach that covers three areas of environmental sustainability: how we impact the environment through our own internal processes, how we assess and manage environmental risk when lending to our customers, and the types of green-focused loans we offer.

Our portfolio in green finance, is formed of Energy Efficiency loans, Renewable Energy loans and Friendly Environmental loans.

As of June 2022, our portfolio of green loans is above 80 mil Eur, representing a share of more than 20% of our loan portfolio, two digits share which has been constant for the last years. Worth mentioning that this share of green loans cannot be found yet in any of the results of any other bank in Romania.

But more than numbers, the main mission of ProCredit Bank is to support the development of small and medium-sized enterprises, which are the backbone of our economy. As a long-term strategic partner of our clients, we advise them not only on financial issues, but also on environmental and social topics.

BR: What is the lender’s vision when it comes to green lending for SMEs?

Stefan Manole, CEO ProCredit Bank: For us, this type of financing is not something new. At both local and group level, we have more than 15 years of experience with a well-developed assessment methodology, which is regularly updated according to the new global standards and changes. At the same time, we continually allocate significant resources for staff training in order for them to be able to perform sound assessment and be familiar with the advantages and challenges that come with this type of investment. It is important to be able to determine how sustainable and cost-effective the client’s investment is in the long run and, of course, how it impacts the environment.

Also, considering that most of our clients are small and medium companies, special focus is placed on analysing how a particular investment would impact the financial condition of the company’s overall operation, as well as the projection of its future results. Our customers often recognise our expertise in this segment; therefore, we motivate them to undertake such steps.

Investment in new machinery that would help save electricity and increase the production capacity and potential are just some of the many examples that create such success stories.

ProCredit Bank aims to foster local and sustainable development, so our approach to RE finance is customed tailored, which means that we do not mind spending more resources than others on the assessment of our clients, which is a cost we incur that pays off in the long term.

BR: What can you tell us about consumers and prosumers?

Stefan Manole, CEO ProCredit Bank: Recently, there has been an increased demand for photovoltaic power plants for electricity production, both for personal use and for sale on the Open Electricity Market. When it comes to photovoltaics, our bank has accumulated significant experience in financing such investments and has specialized staff that understands the technology. Practice has proved that companies with available roof space that spend a lot of electricity on a daily basis, such as all types of production plants and service or trade operations, are suitable for this type of investment. The financial effect of the investment is extremely favorable and the return is between 5-7 years. Therefore, in the last few years, we continuously promote the idea of investing in photovoltaics for own use and we highlight their economic and environmental benefits. In addition to the favorable financing conditions, we offer our clients to choose on a “turnkey” basis one of the several domestic companies-contractors with which ProCredit Bank has concluded a cooperation agreement. This approach gives good results and we expect the interest for this investment to grow in the coming period.

This conception of RE finance goes in line with our philosophy on green SME finance: what matters is not only the volume but also the number of projects we finance.

PV finance has a significant impact on the locally driven energy transition while providing our clients with a secure source of income. When we talk about small-scale rooftop photovoltaic installations for our SME clients, here too we believe that each additional rooftop PV system that we finance is helping to convince at least one more family or one more company of the benefits of the energy transition.

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