IFC Investment in NE Property B.V. to Boost Green Buildings in Bulgaria and Romania

• IFC provides approximately €387 million loan to spur green transition
• Investment aims to reduce greenhouse gas emissions and increase energy efficiency in buildings sector

Bucharest, Romania, and Sofia, Bulgaria, December 22, 2023—IFC today announced a €387 million investment in NE Property B.V. (NEPC), a subsidiary of NEPI Rockcastle (NEPIRC), to drive the green transition in the commercial building sector of Bulgaria and Romania. Providing vital financing to a key retail real estate player amid current financial conditions can effectively address local challenges such as high pollution, energy intensity, and the need for decarbonization.  

This senior unsecured facility is innovatively structured as a green loan with sustainability-linked features, making it the first loan of this kind for NEPIRC. The investment consists of a €225 million senior loan from IFC's own account, a syndicated senior loan of €115 million under IFC's B Loan program, and a senior loan of around €47 from IFC acting in its capacity as the implementing entity for the Managed Co-Lending Portfolio Program.

IFC's substantial investment equips this leading owner and operator of shopping centers in Central and Eastern Europe with the necessary funds to ensure business continuity and advance an ambitious energy-friendly development pipeline. This furthers IFC's objective to mobilize private capital in support of climate-related investments in the region. IFC will also provide advisory support, helping NEPIRC enhance its sustainability efforts and assist the company in attaining EDGE Gender certification, enhancing diversity and inclusion.

"NEPI Rockcastle has set sustainability as a strategic priority at the core of our operations and corporate financing. The recently contracted unsecured green loan arranged by IFC has specific clauses that reinforce our commitment to strengthening our operations and development pipeline in a sustainable way, at higher energy and efficiency standards," said Eliza Predoiu, Chief Financial Officer, NEPI Rockcastle. "The support of IFC together with large international commercial banks is a powerful statement of trust in our strategy, robust balance sheet and strong track record of delivering industry-leading performance in the CEE retail market."

The buildings sectors in Bulgaria and Romania significantly contribute to greenhouse gas emissions due to underdeveloped infrastructure and a lack of modern energy-saving amenities. In Bulgaria, buildings account for about 45 percent of national energy consumption, while in Romania, the number is estimated at around 36 percent.

"Decarbonizing buildings, especially in cities, plays a critical role in the green transition," emphasized Ary Naïm, IFC's Regional Manager for Central and South Europe "IFC's loan enables NEPIRC to advance its  development pipeline of modern, commercial retail assets that are expected to be more energy efficient than local benchmarks."

Economic uncertainty, rising interest rates, and increased construction costs have slowed down the supply of new retail property stock and thereby transition to green buildings in the two countries. With this investment, IFC aims to attract increased investments to accelerate the decarbonization of the retail property sector in the region, promote sustainable finance, and strengthen key players, ultimately making the sector more resilient and aligned with the climate goals of Bulgaria & Romania and other European countries of NEPIRC's operations.

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 2023, IFC committed a record $43.7 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 NEPI Rockcastle

NEPI Rockcastle (NRP.AS) (JSE.NRP) is CEE's largest listed owner, developer and manager of shopping centres, owning over 2,000,000 m2 of high-quality modern retail portfolio across nine Central and Eastern European countries: Romania, Poland, Slovakia, Bulgaria, Hungary, Croatia, the Czech Republic, Serbia and Lithuania. Its growth is being propelled through a c. €600 million development programme, accompanied by accretive acquisitions, with the company's most recent purchases being Forum Gdansk Shopping Centre (Gdansk) and Copernicus Shopping Centre (Torun), both in Poland. NEPI Rockcastle benefits from two key strategic advantages – its unique portfolio of over 50 shopping centres, assembled over the past 15 years and its team of over 600 people who bring unparalleled expert local knowledge in retail property. The company has also become a member of the European Council of Shopping Places (ECSP) and the U.S. Green Building Council (USGBC) to consolidate its market-leading position in the retail real estate industry. For more information, visit www.nepirockcastle.com.