The International Finance Corporation, a member of the World Bank Group, is providing a 55 million-euro loan to Garanti Bank Romania to help finance small and medium-sized companies (SMEs) and their sustainable energy finance projects to generate growth and resilience to climate change.
This is the seventh agreement signed by Garanti Group Romania with IFC during the past seven years. Together with this line, since 2012, IFC has granted a total of 157 million euros to Garanti.
The new loan will allow Garanti to extend its reach to smaller companies. The level of financial intermediation in Romania is one of the lowest in the EU and yet has to fully recover from the global financial crisis. Enlarging financial intermediation is vital to sustain the flow of credit to SMEs, which are integral to Romania’s economy.
“We are proud to have visionary partners such as IFC together with whom we can deploy a solid strategy of supporting projects that bring added value to the community, not just to the economy. As innovators in the financial industry, we believe it is important to pave the way and support SMEs as well as companies that develop energy efficient projects or those that have adopted technologies based on renewable energy,” stated Ufuk Tandogan, CEO of Garanti Bank.
Romania is highly exposed to floods and earthquakes, with past natural disasters resulting in billions of dollars in direct damage. Institutional reforms and recent investments have improved emergency response capacity, but the potential impact of disasters on infrastructure and the most vulnerable populations remains extremely high. As the climate warms, the severity, intensity, and frequency of storms, floods, droughts, wildfires, and extreme temperatures are increasing. Thus, there is an urgent need to build resilience against the impact of increasingly severe climate events.
“Strengthening Romania’s resilience to climate change through private sector projects and increased energy efficiency is essential for uninterrupted growth of the economy,” said Vittorio Di Bello, senior manager for regional industry at IFC. “Our partnership with Garanti Group Romania also ensures that smaller companies and entrepreneurs will continue to have access to the funds they need to grow and create jobs.”