IFC’s Support to Expand Access to Climate Finance in Bulgaria, Croatia, Romania, and Serbia

​Budapest, Hungary, December 1, 2022—A new investment will help expand access to climate finance, supporting small and medium enterprises (SMEs), while bolstering the banking systems in Bulgaria, Croatia, Romania, and Serbia.

IFC's €110 million investment in a senior debt instrument issued by OTP Bank Plc, the largest bank in Hungary, will help improve access to both climate and SME finance in the targeted countries. The markets together have the sixth highest greenhouse gas (GHG) emissions intensity—emissions per unit of GDP—among all EU countries, while the total SME finance gap is almost $90 billion. In response, IFC's funding will specifically target the most underserved SMEs.

OTP bond issuance supported by IFC's investment is eligible under the Minimum Requirement for own Funds and Eligible Liabilities (MREL) framework, in line with the European Union's Banking Recovery and Resolution Directive (BRRD).

"The deal's success reflects the investors' understanding of OTP Group's outstanding position in Hungary and also in the region. We are really satisfied with the demand we experienced, the strong IFI support and also with the final transaction volume," said Sándor Pataki, OTP`s Head of Investor Relations and Debt Capital Markets.

With around 40 percent of IFC's investment dedicated to mitigating climate change, the funding is expected to help reduce GHG emissions of approximately 57,800 tons of CO₂ equivalent per year. This will involve financing energy efficient improvements for existing and new buildings, fostering renewable energy, clean transportation, and others.

"This project marks an important partnership with a leading regional bank. It will allow IFC to increase on-lending for climate and socially oriented projects, our top priorities in the region. It will also help bolster the resilience of the banking sector by diversifying its funding base," said Alfonso Garcia Mora, IFC's Vice President for Europe, Latin America, and the Caribbean. "By supporting this bond issuance, IFC also fulfilled its countercyclical role by strengthening market confidence and catalyzing funding at a time of increased risk aversion towards the region."

IFC will also help the bank enhance its environmental, social, and governance (ESG) risk management policies and procedures in line with IFC's Performance Standards.

An IFC client since early 2000, OTP is a systemic institution that heads one of the largest banking groups in Central and Southeast Europe with a market share of over 25 percent by assets. In the past, IFC has partnered with OTP and its subsidiaries through several investment projects.

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 2022, IFC committed a record $32.8 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 OTP Bank

OTP Bank is one of the most stable financial institutions in the CEE region with outstanding profitability and stable capital and liquidity positions. Our success and growth are underpinned by sustainable and stable operations and made unique by our 70-year history of expertise and regional knowledge. After the realization of its own privatization process, OTP Bank started its international expansion targeting countries in the CEE region, which offer great economic growth potentials similar to that of its domestic market. At present, OTP Group provides universal financial services in 11 countries to nearly 16 million customers, has a network of more than 1,400 branches and has more than 35,500 employees. OTP Group is headquartered in Budapest, Hungary and has a diversified and transparent ownership structure. The banking group has been listed on the Budapest Stock Exchange since 1995. For more information, visit website, LinkedIn, Facebook.