Washington D.C., April 9, 2024—IFC, a member of the World Bank Group, and BNP Paribas Bank Polska (BNPP Poland), a subsidiary of BNP Paribas S.A. Group (BNPP Group), announced today a new Synthetic Significant Risk Transfer (Synthetic SRT) transaction, which will help increase sustainable finance for renewable energy, water efficiency, and clean transportation projects in Poland.
Innovative financial instruments such as SRTs are a growing asset class in emerging markets and can enhance the resilience of financial markets by freeing up bank capital as well as alleviating access-to-finance constraints.
This transaction, in which IFC will take mezzanine exposure to a $548 million-equivalent BNPP Poland on-balance sheet credit portfolio, marks the first SRT transaction by BNPP Poland and the second between IFC and BNPP Group (where the first involved BNPP Group's global emerging markets trade finance operations). IFC's investment will assist the bank in generating new PLN-denominated sustainable finance loans in Poland. The project marks IFC's first SRT with the "Simple, Transparent, and Standardized" designation, which enables such transactions to be more scalable for issuers, investors, and regulators.
"Risk-sharing transactions, such as this SRT, can increase access to sustainable finance at a time when massive investments are needed to accelerate the green transition. At IFC, we are proud to be playing a leading role in the introduction of SRTs to banks in emerging markets, by working with them on transactions involving both global EM credit portfolios as well as portfolios in individual countries. These investments play a critical role in demonstrating the viability of emerging market-oriented SRTs to financial institutions and investors," said Tomasz Telma, Director and Global Head of IFC's Financial Institutions Group.
"We are honored to partner with IFC on the strategic SRT in Poland. The transaction clearly highlights the power of collaboration to catalyze the climate transition in emerging markets. Our SRTs with IFC, with Poland being the second one, set a precedent for future risk-sharing partnerships," said Laurent Leveque, Global Head of Official Institutions Coverage at BNP Paribas.
"BNP Paribas Bank Polska has consistently financed numerous sustainable infrastructure investments to guide the Polish economy in a more environmentally-friendly direction. The synthetic securitization allows us to become even more active in this field, reenforcing us as a lynchpin of sustainable transformation in Poland," said Przemek Gdański, CEO of BNP Paribas Bank Polska.
Despite progress in renewable energy, Poland remains one of the most carbon-intensive countries in Europe, with fossil fuels accounting for nearly 80 percent of the country's energy supply in 2023. Polish banks are constrained in their capacity to finance the energy transition – estimated to cost $350 billion between 2021-2040. In this environment, SRT transactions allow banks to lower risk weights on their asset exposures, thereby freeing up urgently needed capital to expand access to climate finance.
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 BNP Paribas Bank Polska
BNP Paribas Bank Polska S.A., which has been listed on the Warsaw Stock Exchange since 2011 is a member of the BNP Paribas banking group whose footprint spans 63 countries. In Poland, as a universal bank with a global reach, it provides services to retail customers and other segments including Wealth Management, microbusinesses, SMEs and corporate banking. As it advocates green initiatives, BNP Paribas supports its clients in the transition to a low carbon economy, endeavors to curtail the adverse impact of its operations on the natural environment and inspires clients to make good financial decisions. The Bank also consistently pursues its strategy of financing businesses in Poland while also supporting investments of strategic importance to the country with a positive social, economic and environmental impact.
About BNP Paribas
BNP Paribas is the European Union's leading bank and key player in international banking. It operates in 63 countries and has nearly 183,000 employees, including more than 145,000 in Europe. The Group has key positions in its three main fields of activity: Commercial, Personal Banking & Services for the Group's commercial & personal banking and several specialised businesses including BNP Paribas Personal Finance and Arval; Investment & Protection Services for savings, investment and protection solutions; and Corporate & Institutional Banking, focused on corporate and institutional clients. Based on its strong diversified and integrated model, the Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, BNP Paribas has four domestic markets: Belgium, France, Italy and Luxembourg. The Group is rolling out its integrated commercial & personal banking model across several Mediterranean countries, Turkey, and Eastern Europe. As a key player in international banking, the Group has leading platforms and business lines in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific. BNP Paribas has implemented a Corporate Social Responsibility approach in all its activities, enabling it to contribute to the construction of a sustainable future, while ensuring the Group's performance and stability.
