BUCHAREST, June 17, 2005 —
The International Finance Corporation, the private sector arm of the World Bank Group, will provide a Euro 7.5 million loan to Unicredit Leasing Romania S.A.
The agreement was signed today in Bucharest by Ana Maria Mihaescu, IFC’s chief of mission in Romania, and Melih Mengu, chairman and CEO of UniCredit Leasing Romania (UCL).
UCL, formerly known as Demir Leasing, is a fast-growing joint stock leasing company established in 1994 and based in Bucharest, Romania. IFC is a founding shareholder of the company, which was the first leasing company to operate in Romania. It is one of the leading equipment leasing companies in the country serving small and medium enterprises and other corporate sectors.
IFC’s investment will support the growth of the company’s leasing portfolio, which is targeted at smaller businesses. The leasing market has been growing relatively fast in Romania, and the total market there is estimated at about $2 billion. Romania is expected to join the European Union within the next few years, and the demand for leasing is expected to grow, particularly as Romanian companies improve their environmental and quality standards in order to be more competitive in a larger EU market.
IFC’s focus in Eastern Europe has been to build and strengthen financial intermediaries. The leasing sector in Romania is developing rapidly, and IFC believes that there is a significant opportunity to accelerate its growth. With this investment, IFC will help expand a reputable leasing company and strengthen the country’s leasing industry.
Jyrki Koskelo, IFC’s director for Global Financial Markets, noted that “IFC’s investment is part of an ongoing effort to assist in the development of Romania’s financial sector, including through leasing, which is still a small segment of the market. The project will contribute to the deepening of the overall financial sector through growth and increased competition.”
Khosrow Zamani, IFC's director for Southern Europe and Central Asia, added, “IFC is pleased to support UCL, a non-bank financial institution, playing an important role in providing a source of medium-term funding for private sector companies, particularly small and medium enterprises. IFC’s investment fits well with our regional strategy to support the Romanian economy through private sector development.”
Melih Mengu, chairman and CEO of the company, stated, “The loan emphasizes the long-term relationship between IFC and UniCredit Leasing Romania, which began in 1993. As a founding shareholder and a pioneer of the leasing industry in Romania, IFC has financed UCL with about $20 million overall.”
The mission of IFC (
www.ifc.org)
is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
