- Investment will increase access to finance for small businesses
- Half of the proceeds will be earmarked for the climate projects
Bucharest, Romania, November 28, 2023—A new investment will help increase access to finance for climate-smart projects and small businesses, with IFC investing up to €50 million in UniCredit Leasing Corporation S.A. (UCLC), a subsidiary of UniCredit Bank S.A. Romania and part of UniCredit S.p.A., to scale up Romania's sustainable energy capacity for future resilience.
IFC's funding will allow UCLC, a leading leasing company in Romania, to boost its small and medium enterprise (SME) portfolio, with half of the proceeds earmarked for climate finance projects. The loan will also enable UCLC to enhance its climate finance product line, increasing the competitiveness of the country's climate finance market.
In Romania, SMEs create about 70 percent of the country's jobs. Yet they have limited access to funding, with the SME finance gap estimated at $33 billion and 35 percent of SMEs fully or partially credit constrained. In addition, the country's investment needs are estimated at $165 billion between 2021 and 2030 to meet its nationally determined contribution to climate change mitigation.
Romania is one of the most energy-intensive economies in Europe due to the high energy intensity of its manufacturing sector and SMEs. Climate change mitigation is an urgent priority for the country. Also, under the European Green Deal, European Union member states are required to achieve carbon neutrality by 2050 and are committed to reduce CO₂ emissions by 55 percent compared to 1990 levels by 2030.
In response, at least 50 percent of the IFC investment will be used to finance energy efficiency and renewable energy projects along with green transport technologies, reducing greenhouse-gas emissions and lowering energy consumption, while expanding the use of leasing as an alternative financial product suitable for various climate mitigation related projects. The project is expected to result in GHG emissions reduction of as much as 6,067 tons of CO2 equivalent a year by the end of 2027.
"This financing is in line with UniCredit Group's broader sustainability strategy: building on strong fundamentals to deliver value. In our position as a leader in the leasing industry we have not only a role but also a duty to support the SME segment by structuring financing for assets that will reduce emissions and promote green energy production," said Daniela Bodîrcă, CEO of UniCredit Leasing. "This leadership position that we have on the market for 15 years now is not only a reference of numbers, but of the fact that our relevance is a direct effect of our common effort to stay tuned to the market trends and, most important, to listen to our clients and business partners. We share this responsibility towards our internal team, our partners, our clients, and, through our ESG commitments, towards society at large. ESG has become part of our business DNA."
IFC will also support UCLC to grow and expand its climate finance business while helping the company improve its internal processes to increase climate lending for SMEs and corporates.
"Our partnership with UniCredit Group will expand much needed access to financing for SMEs and for green investments in Romania," said Etleva Koka, IFC Regional Industry Manager for Europe, Financial Institutions Group. "For Romania`s green transition to be successful, it will require the full depth and breadth of its local financial sector. Leasing is a great product to finance investments in distributed generation, cleaner and energy efficient production, and e-mobility, to only mention a few."
IFC has supported private sector development in Romania for over 30 years, with a committed exposure reaching $1,7 billion as of June 30, 2023, boosting the country`s green transition, digital and physical connectivity, and integration into global value-chains.
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 2023, IFC committed a record $43.7 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 UniCredit Leasing
UniCredit Leasing Corporation IFN S.A., a non-bank financial institution whose main activity is financial leasing, is part of the UniCredit Romania financial group, together with UniCredit Bank S.A and UniCredit Consumer Financing IFN S.A, offering their beneficiaries a complete range of financial products and services and other additional services. In addition to the entities mentioned above, the UniCredit group is also present in Romania through the following non-financial entities: UniCredit Leasing Fleet Management S.R.L., which provides operational leasing services, and UniCredit Insurance Broker S.R.L., which serves the area of insurance intermediation services. For more information, visit www.unicreditleasing.ro.
