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IFC invests in Raiffeisen Bank Romania to expand access to finance for SMEs and green homes

IFC, a member of the World Bank Group, is providing a financing package of RON 720 million (USD $168 million equivalent) to Raiffeisen Bank Romania to boost financing for small and medium enterprises (SMEs), climate, and housing—three underserved segments in Romania’s economy.

The financing package consists of a RON 240 million investment in a Basel III-compliant Tier 2 bond—which will support the Bank’s capital base–and a RON 480 million senior loan. The IFC investments will help Raiffeisen Bank Romania expand its lending to SMEs, increase financing for sustainable-energy projects and for mortgages, including green mortgages.

“In addition to helping Raiffeisen Bank strengthen its capital base, the financing will enable the bank to increase its funding of green housing and grow its sustainable-finance business,” said Steven van Groningen Raiffeisen Bank Romania President & CEO. “The financing will also help us to further support SMEs in Romania, which play an important role in creating economic output and job creation but face substantial challenges in accessing finance.”

“This investment is a part of IFC’s capital markets development strategy in Romania,” said Vittorio Di Bello, IFC Senior Manager, Financial Institutions Group, Europe and Central Asia. “It is the first subordinated local-currency bond issue in the Romanian market and clearly signals the progress the country’s capital markets have made over the past few years.”

Raiffeisen Bank Romania is a long-standing IFC client. Since 2004, IFC has provided $61 million financing to the bank through a senior loan for SME finance and by investing in senior bonds issued by the bank.