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Unfunded risk-sharing, new EBRD product for Romanian banks

By Olga Rosca

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  • Unfunded risk-sharing framework for Banca Transilvania and Raiffeisen Bank
  • New EBRD guarantee product for Romanian banks to expand businesses’ access to finance
  • EBRD to guarantee up to 65 per cent of each individual sub-loan by two lenders

The European Bank for Reconstruction and Development (EBRD) is launching a new risk-sharing framework for Romanian banks, with Banca Transilvania and Raiffeisen Bank the first to benefit.

The risk-sharing framework is designed to allow the EBRD to share partner banks’ exposures to local enterprises through either funded or unfunded risk participation. The facilities to both Banca Transilvania and Raiffeisen Bank are provided on an unfunded risk participation basis, which makes it more akin to a guarantee.

The EBRD will guarantee up to 65 per cent of each individual sub-loan provided by the two lenders to eligible clients. Its commitment under the respective agreements could reach up to €150 million to Banca Transilvania and €100 million to Raiffeisen Bank.  

Mark Davis, EBRD Regional Director for Romania and Bulgaria, said: “We want to ensure that `businesses in Romania have access to a more diverse range of financing sources that suit their needs. Risk-sharing is a new instrument in our toolbox as we continue providing finance that encourages investment and economic growth. I am pleased that our two strong partners Banca Transilvania and Raiffeisen Bank have already signed up.”

The EBRD is a leading institutional investor in Romania. To date, the EBRD has invested €9.5 billion through 485 projects in the country, where some 77 per cent of the EBRD’s investments are in the private sector.

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