March 30 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Thursday it is providing a 40 million euro ($43.1 million) loan to Romanian lender Banca Transilvania [BSE: TLV] to improve the energy efficiency of the country’s residential building stock.
The loan is being considered under the Green Economy Finance Facility (GEFF), a programme with a volume of up to 100 million euro to finance green investments in Romania, EBRD said in a press release.
The framework will initially comprise 50 million euro from the EBRD’s own funds, while the TaiwanICDF, which is in charge of Taipei China’s overseas development programme, has committed $20 million to date.
The financing will be used for on-lending to eligible sub-borrowers for investments in energy and resource efficiency measures in the residential buildings.
The loan is expected to demonstrate the effects of green economy investments to Banca Transilvania and sub-borrowers and to contribute to market expansion by increasing the availability and access to residential green economy finance and high-performance green technologies, the EBRD noted.
“This is the third line of EBRD financing our bank has received to support investment in energy efficiency projects. The first two lines were dedicated to small and medium-sized enterprises, and now, for the first time, the target is retail clients,” Banca Transilvania CEO Omer Tetik said.
Romania remains one of the most energy-intensive EU countries, as its residential sector accounts for 36% of the country’s final consumption, the highest among all sectors, while the EU average is 24%, the international lender said.
Banca Transilvania is the first bank to on-lend EBRD funds targeting energy efficiency in the residential sector. It is expected that several other Romanian banks will join the programme.
The EBRD acquired a 15% stake in Banca Transilvania in 2001 to strengthen the Romanian lender's capital base and support the expansion of its activities and loan portfolio. The EBRD reduced its equity stake to 11.47% in 2015 and cut it further, to 8.6%, in November 2016.
Banca Transilvania, established in 1994, was the second largest bank by total assets in Romania as of December 2016. It is listed on the Bucharest Stock Exchange since 1997, with a current market capitalization of around 2.2 billion euro.
Shares in blue-chip Banca Transilvania traded 0.73% higher at 2.7650 lei as at 1606 CET on Thursday.
($= 0.92 euro)
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