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IFC invests in NEPI Rockcastle arm to back green buildings in Bulgaria, Romania

February 1, 2024

 The International Finance Corporation (IFC) said it is lending 387 million euro ($424.3 million) to NE Property B.V. (NEPC), a subsidiary of Dutch-registered shopping centre developer NEPI Rockcastle, to reduce greenhouse gas emissions and boost energy efficiency in the commercial buildings sector of Romania and Bulgaria.   The senior unsecured financing package is structured as a green loan with sustainability-linked elements, which is the first loan of this kind for NEPI Rockcastle (NEPIRC), IFC - the World Bank's investment arm - said in a press release in late December.   IFC is providing a 225 million senior loan from its own account, which is complemented by a syndicated senior loan of 115 million euro under IFC's B Loan programme and a senior loan of around 47 million euro under the Managed Co-Lending Portfolio Program.   The financing will help NEPIRC, which is a major owner and operator of shopping centres in Central and Eastern Europe, to fund the decarbonisation of commercial buildings and advance a pipeline of energy efficient development projects. Underdeveloped infrastructure and a lack of modern energy-saving amenities make the buildings sector a major contributor to high greenhouse emissions in Bulgaria and Romania. In Bulgaria and Romania, buildings account for about 45% and 35% of national energy consumption, respectively. The supply of new, more green retail building stock has been slowed in both countries by the uncertain economic climate, rising interest rates and higher construction costs, IFC said.   "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," Ary Naim, IFC's regional manager for Central and South Europe, said. Euronext-listed NEPIRC owns over 2 million square metres of retail real estate in Romania, Poland, Slovakia, Bulgaria, Hungary, Croatia, the Czech Republic, Serbia and Lithuania. The company runs more than 50 shopping centres and employs over 600 staff. Bulgaria and Romania make up 44% of the value of the company's property portfolio, according to its website.   Most recently, NEPIRC opened a shopping centre in the southwestern Romanian city of Craiova. In Romania, it owns shopping centres also in Bucharest, Braila, Constanta, Ploiesti, Sibiu, Timisoara and other cities. In Bulgaria, the group owns the Serdika and Paradise Center shopping malls in Sofia.

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