IFC Invests €100m in Sustainable Projects in Central, Eastern Europe
Central and Eastern European countries are poised for a sustainable energy transition through this financing.
The fund will support approximately 10 infrastructure projects, strengthen energy security and help them transition to a low-carbon economy.
The International Finance Corporation (IFC) has announced investments of up to €100 million to back sustainable infrastructure projects in Bulgaria, Poland, and Romania.
The IFC is investing in a senior unsecured bond issued by Kommunalkredit Austria AG (Kommunalkredit), marking its first investment in a specialised infrastructure financial institution in Europe.
Incidentally, the Asian Infrastructure Investment Bank (AIIB) is also investing up to €100 million in sustainable projects, increasing the bond's total value to €200 million.
ALSO READ: Indonesia Receives IFC Green Loan to Decarbonise Retail Properties
The proceeds will support around 10 infrastructure projects in Bulgaria, Poland, and Romania, with a total transaction value of about €600 million. The projects will focus on upgrading the energy infrastructure, especially renewable energy, which will help diversify their energy sources.
As of now, renewable energy only accounts for around 14-19% of their total energy supply, which is well below the EU's climate targets.
The IFC targets to channel more private financing into sustainable infrastructure projects by investing in Kommunalkredit. This will prepare these countries to build their energy security and help them transition towards a low-carbon economy.
Vittorio Di Bello, IFC Regional Director for the Financial Institutions Group in Europe, Latin America and the Caribbean, added: "Our investment in Kommunalkredit’s bond will channel critical funding into sustainable energy projects in Bulgaria, Poland, and Romania.
"By supporting financial intermediaries like Kommunalkredit, we can harness their expertise to drive the low-carbon transition in key regions, diversify energy sources, and spur sustainable and inclusive economic growth."
Sebastian Firlinger, Acting CEO of Kommunalkredit, said: "We are delighted to join forces with IFC and AIIB—two global organizations that share our vision for sustainable development—to advance the sustainable transition and boost private sector investment in emerging markets.
“This transaction marks the beginning of what we anticipate will be an impactful long-term partnership between our three organizations.”
Follow KnowESG's Sustainable Finance News for regular news and views.
Discover an extensive network of ESG providers here
Check out KnowESG's latest ESG Course updates
Source: IFC
