Submitted by: International Finance Corporation
Posted: Oct 16, 2006 – 02:21 PM EST
Oct. 16 /CSRwire/ - Washington, D.C.- The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement with Raiffeisenbank Bosnia-Herzegovina to provide a 350,000 grant, which will allow it to develop and roll out energy efficiency housing loan products in the country. The grant, which supplements an initial loan of 15 million loan made to RBBH in July 2006, was made possible through a contribution from the Austrian Development Cooperation to IFC's Environmental Opportunities Facility.
Much of the housing in Bosnia and Herzegovina is of poor quality and has not been upgraded due to a long period of war. The grant, part of which will finance capacity building and training activities, will support the incorporation of an energy efficiency component into RBBH's existing mortgage loan products.
Rachel Kyte, IFC's Director for Environment and Social Development, said, "In partnership with Austria and Raiffeisenbank, we aim to demonstrate that energy efficiency is a profitable component of the mortgage industry and has clear environmental and social benefits.
We have financed similar projects in Eastern Europe and Russia, and we are happy to use our expertise in Southeast Europe."
Ognjen Samardic, a management team member of RBBH, said, "Under current conditions in Bosnia and Herzegovina's banking market, cooperation with IFC will help us continue developing innovative products, such as loans for energy efficiency projects. In addition to helping us offer quality products with favorable interest rates to customers, the program aims to reduce energy consumption and pollution in the country."
Jyrki Koskelo, IFC's Director for Global Financial Markets, said, "Energy efficiency and clean energy are a strategic priority for IFC. There are increasing opportunities, not only in Europe but globally, and we are ramping up our investment and support in this sector in cooperation with the Austrian government and other partners."
Ambassador Michael Linhart, Managing Director of the Austrian Development Agency, said, "Promotion of sustainable and socially balanced economic development is one of the main objectives of the Austrian Development Cooperation in Southeast Europe. The provision of renewable energy and solutions to enhance energy efficiency are important tools for private sector development, including creation of employment opportunities in the region. And these measure can alleviate the often tense relationship between the aims of economic growth and environmental protection."
IFC and Austria have already teamed up in Bosnia and Herzegovina, where IFC provided a 3 million loan to Ekonomic Kredit Institution. The Austrian Development Cooperation complemented the loan with a 60,000 grant to train EKI's loan officers in processing energy efficiency housing loans.
As of June 2006, IFC had committed more than $285 million to support sustainable energy projects in industrial, municipal, and residential sectors in Eastern and Central Europe, Russia, China, and the Balkans. In FY06, IFC leveraged a total of $1.8 billion in sustainable energy projects worldwide.
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit www.ifc.org.
About Raiffeisenbank Bosnia-Herzegovina
RBBH is a member of the RZB Group and a subsidiary of Raiffeisen International Bank-Holding AG. It is the leading bank in Bosnia and Herzegovina, with 21.1 percent market share in terms of assets, 72 outlets throughout the country, and more than 1,300 employees.
About the Austrian Development Agency
ADA is the operational unit of the Austrian Development Cooperation and Cooperation with Eastern Europe. It is responsible for the implementation of about 700 projects in partner countries as well as the administration of the budget earmarked for bilateral programs. ADA takes part in multilateral development cooperation projects, both at the European Union level and within international organizations, and cooperates closely with nongovernmental organizations and private businesses.
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