IFC supports Romania’s private sector with record investment amid COVID-19 pandemic

Despite the economic challenges of the COVID-19 pandemic, IFC ramped up support for Romanian companies with a record investment of $429 million in FY 2021—between July 2020 and June 2021—to protect jobs, save small businesses, and accelerate green and resilient economic recovery in the country.

IFC’s investments in Romania primarily focused on increasing financial inclusion, addressing the financing needs of small and medium enterprises (SMEs), promoting green initiatives to fight climate change, strengthening capital markets, and boosting the resilience of systemic banks.

To support Romania’s recovery efforts, IFC invested RON474 million (approximately over $110 million equivalent) in bonds issued by two of the country’s systemic banks (Raiffeisen Bank S.A and Banca Comercială Romana S.A). The bonds, 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, are IFC’s first investments in MREL instruments—a first for the country as well.

Further, IFC supported the construction of an eco-friendly information technology and communications complex in the country with approximately €72-million financing to Palas Campus, a wholly-owned subsidiary of Iulius Holding. The investment marks IFC’s first green loan to a domestic company. Also, IFC’s €42.5 million investment in the green bond issued by CTP N.V., along with a €73.5 million green loan to N.E. Property B.V. will help Romania expand its green business infrastructure while tackling climate change.

​To address the growth capital needs of SMEs in Romania and other countries in the region, IFC provided €60 million to three regional funds—Evolving Europe Principal Investments Fund I, BlackPeak Southeast Europe Growth Equity Fund, and LAUNCHub Fund II. The investments made through the regional funds and CTP N.V. are incremental to IFC’s $429 million total investment in the country. 

“In the midst of the COVID-19 crisis, we continued to invest across strategic industries in Romania with a special focus on climate change and financial inclusion,” said Wiebke Schloemer, IFC Director for Europe and Central Asia. “Our record investment in the country signals our confidence in Romania’s recovery and long-term growth path and our commitment to supporting a green recovery”. 

Since the outbreak of the pandemic, IFC has focused its efforts on helping the private sector mitigate the economic fallout. In March 2020, IFC announced $8 billion in global fast-track financing to help companies affected by COVID-19. In Europe and Central Asia, IFC stepped up to support its existing clients and help them address the impacts of the crisis. 

Cristian Nacu, IFC Senior Country Officer for Romania, said: “We are delighted to have supported Romania with a record investment amount amid COVID-19. We will continue to actively seek and fund projects to boost economic growth and job creation while helping the country achieve its green agenda.” 

IFC has supported private sector development in Romania for over 30 years, with a committed exposure reaching $1,025 billion as of June 2021.