IFC’s Investment in Romania’s First Sustainability Bond to Catalyze Financial Inclusion, Support Future Resilience

Romania’s first sustainability bond will help promote both climate and social financing, with IFC investing $42 million equivalent to strengthen the financial sector and promote financial inclusion in the country.

The local currency-denominated senior non-preferred sustainability bonds, issued by Romania’s Raiffeisen Bank S.A. (RBRO), will help the bank increase its lending to businesses investing in climate-smart initiatives—green buildings, renewable energy, energy efficiency, clean transportation, sustainable agriculture, and others—in addition to supporting social financing in areas including health care, education, basic infrastructure, and affordable housing.

The bond has been issued in compliance with RBRO’s Sustainability Bond Framework and will help enhance the bank’s stability as a systemic financial institution in Romania.

“Through this new bond issue, we reconfirm our pioneering role and our commitment to support a sustainable development of the Romanian economy, to contribute to strengthening the resilience and competitiveness of Romanian companies. We are also pleased with the interest shown by institutional investors for the first sustainable bond issue on the local market, which shows us that social issues, not only environmental ones, are starting to play an important role in the capital allocation decision process,” said Cristian Sporis, Vice President at Raiffeisen Bank.

IFC’s current investment follows three earlier investments in the bank’s green bonds issuances. The first investment of $20 million equivalent on May 14, 2021, 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).

“IFC’s investment in RBRO’s bonds will help contribute to a strong sustainability bond market and promote private sector investment in the country,” said Vittorio Di Bello, IFC’s Regional Head of Industry for Financial Institutions in Europe. “With this funding, IFC is signaling its support for best practices in sustainability and the sustainable bond market as a key tool to finance a robust and resilient green recovery in Romania.”

An IFC client since 2004, RBRO is a member of the Raiffeisen Bank International (RBI) Group. The financing builds on IFC’s existing relationship with RBRO and RBI, expanding IFC’s engagement with RBRO in the climate finance space.

About RBRO

RBRO is a subsidiary of Raiffeisen Bank International (RBI) and is one of the systemic banks in Romania. The bank, currently ranked fourth by net loans with a 10 percent market share (as of December 31, 2021), has an extended history on the local market and offers a wide range of banking services with a nationwide presence. As of December 31, 2021, RBRO served 2.25 million clients, with over 4,600 employees and 300 outlets. The bank holds a Long-Term Counterparty Risk Rating and a Long-Term Deposit rating of Baa1/stable outlook from Moody’s.

About IFC

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 2022, IFC committed a record $32.8 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. For more information, visit www.ifc.org.