The International Finance Corporation (IFC) is committing an investment of up to €100 million in a senior unsecured bond issued by Kommunalkredit Austria AG (referred to as Kommunalkredit). This landmark investment represents IFC’s inaugural venture into financing a specialized infrastructure financial institution within Europe, aimed specifically at enhancing fiscal support for sustainable infrastructure projects across Bulgaria, Poland, and Romania.
This strategic investment is complemented by an equal contribution from the Asian Infrastructure Investment Bank (AIIB), allowing the bond issuance to reach its targeted total size of €200 million. The initiative is poised to strengthen the resilience of the power sector in these three Eastern European nations by facilitating a diversification of their energy portfolios.
Sebastian Firlinger, the Acting CEO of Kommunalkredit, expressed enthusiasm for this collaboration, stating, “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.” He emphasized that this transaction sets the stage for what they anticipate to be a fruitful and impactful long-term partnership among the three institutions.
Currently, the contribution of renewable energy sources in Bulgaria, Poland, and Romania ranges between 14 to 19 percent of their overall energy mix, which falls significantly short of the European Union’s established sustainability targets. This stark reality underscores the urgent need for increased investment and action in sustainable energy infrastructure.
Vittorio Di Bello, IFC Regional Director for the Financial Institutions Group in Europe, Latin America, and the Caribbean, remarked, “Our investment in Kommunalkredit’s bond will channel critical funding into sustainable energy projects in Bulgaria, Poland, and Romania. By backing financial intermediaries like Kommunalkredit, we can leverage their substantial expertise to facilitate a low-carbon transition in vital regions, diversify energy sources, and promote sustainable, inclusive economic growth”.
IFC’s comprehensive long-term strategy in Bulgaria, Poland, and Romania is designed to accelerate the transition towards a resilient, low-carbon, and inclusive economic framework. The organization has been deeply engaged in these nations, concentrating its efforts on bolstering economic advancements, enhancing critical infrastructure, and expanding access to reliable energy for their populations.
