Bucharest, Romania, July 17, 2023—A targeted IFC investment aims to increase access to residential mortgages in Romania while helping mitigate climate change and strengthen the country's banking sector. IFC is providing EUR 100 million to Banca Transilvania (BT), the largest bank in the country, as part of a EUR 200 million subordinated debt financing package alongside the Asian Infrastructure Investment Bank (AIIB).
This financing initiative addresses challenges stemming from the country's outdated, inadequate, and energy-inefficient housing supply. It will expand housing finance options and improve living conditions by encouraging the supply of more efficient and environmentally friendly housing.
"The new financing facility organized by IFC helps us intensify our financing efforts in areas of interest for the transition to a sustainable economy in Romania. Thus, directing the obtained funds towards energy-efficient mortgages will decrease energy consumption and greenhouse gas emissions while ensuring improved housing conditions," said Ӧmer Tetik, CEO of Banca Transilvania.
Ranking fifth highest in greenhouse gas (GHG) emissions among EU countries and 42nd globally, Romania needs to take urgent action to reduce its carbon footprint, green its housing stock, and improve air quality and energy efficiency. The investment from IFC will be primarily dedicated to residential mortgage financing, with a minimum of 80 percent allocated to green mortgages.
The subordinated debt, to be listed on the Bucharest Stock Exchange, adheres to the regulatory frameworks of Basel III, as well as of the EU and Romania. By serving as Tier 2 capital, the hybrid capital instrument will help enhance BT's resilience and bolster Romania's banking sector.
"Private sector investment is critical to increasing access to affordable housing finance," said Marcelo Castellanos, IFC's Senior Regional Industry Manager, Financial Institutions Group, for Europe. "We aim to address the housing problem in Romania with our long-term partner BT while helping the country achieve its climate mitigation targets through improved household energy efficiency."
Since 2004, IFC's partnership with Banca Transilvania has led to 14 investments and three advisory projects.
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.
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About Banca Transilvania
Banca Transilvania is the largest bank in Romania and the main financier of the economy, covering all customer segments and business lines in the financial sector. With a history that started almost 30 years ago, it has 20% market share, 4 million customers, over 9,000 employees, online banking solutions and 500 branches in 180 locations. Banca Transilvania's brand value crossed the threshold of USD 500 million and entered the top 300 in Brand Finance Banking 500 in 2023. Beyond banking, BT wants to make a positive impact in Romania for people, businesses, and the environment.
