Romania: IFC’s investments in Raiffeisen green bond issue

Published on 11. June 2021., SEE Energy News

The international Finance Corporation (IFC) is investing 72 million dollars in local currency-denominated senior non-preferred bonds, placed by Romanian subsidiary of Raiffeisen Bank (RBRO). This is IFC’s second investment in RBRO’s green bonds this year, following its first investment of 20 million dollars on 14 May, in RBRO’s first senior preferred bonds, which was also the first green bond issued by a financial institution in Romania.

The bonds are expected to qualify for the Minimum Requirement for own funds and Eligible Liabilities (MREL) in line with the European Union’s Banking Recovery and Resolution Directive (BRRD).

RBRO CEO Steven Van Groningen said that, with its second green bond issuance, the bank is continuing the path to mobilize capital for sustainable purposes, to integrate social and environmental considerations in risk management, to ensure a progressive decarbonization of portfolios and to include sustainability factors into key business areas.

The bonds have been issued in compliance with RBRO’s Green Bond Framework, and 100 % of the proceeds will be channeled to eligible climate finance projects in five key areas. These include green buildings, renewable energy, energy efficiency, clean transportation, and sustainable agriculture. Further, the bonds will support RBRO in achieving the targeted cushion for its own funds and eligible liabilities, enhancing the bank’s stability as a systemic financial institution in Romania.

IFC’s Regional Head of Industry for Financial Institutions in Europe and Central Asia Vittorio Di Bello said that one of IFC’s strategic priorities in Romania is to help promote sustainable growth. In alignment, our second investment in RBRO’s bonds aims to create a vibrant green bond market by stimulating private sector investment in the country.

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