Infrastructure investor Kommunalkredit Austria is issuing a €200m bond to help accelerate the green energy transition in Central and Eastern Europe (CEE) and Turkey.
The International Finance Corporation (IFC) and the Asian Infrastructure Investment Bank (AIIB) are investing up to €100m each in the senior unsecured bond issued by Kommunalkredit.
The funds will be invested in renewable energy projects, particularly wind power, as part of the region’s broader commitment to decarbonisation.
Kommunalkredit has been a trusted partner for supranational institutions in financing large-scale infrastructure projects.
This new initiative joins forces of IFC, AIIB and Kommunalkredit, which share a common goal to finance green projects in the CEE region, a critical area for achieving EU climate targets.
IFC pursues its vision to finance specialised infrastructure in Europe and aims to finance wind projects in Bulgaria, Poland and Romania.
The investment will bolster the power sector’s resilience in the three countries and diversify the energy mix.
As part of the European Green Deal, these efforts will also help reduce greenhouse gas by 55% by 2030 and reaching climate neutrality by 2050.
Those countries face significant energy transition challenges, with renewable energy currently accounting for just 14-19% of their total energy consumption – far below EU targets.
To meet these challenges, the countries have committed to the European Green Deal, which aims for a 55% reduction in CO2 emissions by 2030.
However, achieving these ambitious goals will require substantial additional investment in climate-related financing.
“With our passion for sustainable infrastructure projects, we have perfectly aligned missions with IFC and AIIB to drive green transition and private sector investments in emerging markets”, said Sebastian Firlinger, Acting CEO of Kommunalkredit.
“We are honoured to collaborate with supranational organizations in a field where we share a common vision for sustainable development.
“This transaction marks the first step in what we hope will be a long-term partnership between Kommunalkredit, IFC and AIIB.”
Gregory Liu, Director General of Global Financial Institutions and Funds Department at AIIB, said: “Together, we are working towards a shared vision of sustainable infrastructure that meets the needs of the future and addresses climate challenges in this vital region.”
“Our investment in Kommunalkredit’s bond will channel critical funding into sustainable energy projects in Bulgaria, Poland, and Romania”, said Vittorio Di Bello, IFC Regional Director for the Financial Institutions Group in Europe, and Latin America and the Caribbean.