IFC Proposes €150m Sustainability-Linked Financing Plan for Lion’s Head Investments

IFC Proposes €150 Million Financing Package for Lion’s Head Investments in Bulgaria and Romania

International Finance Corporation (IFC), a member of the World Bank Group, has put forward a sustainability-linked financing package of €150 million to support Lion’s Head Investments AD (LHI), a commercial property investment platform focusing on Bulgaria and Romania. The investment will be utilized for the acquisition and development of logistics assets, as well as partial refinancing and capital expenditure for the existing office portfolio.

The logistics assets that will be acquired are expected to receive certification from IFC’s Advanced Excellence in Design for Greater Efficiencies (EDGE) green building program. LHI, which was established in 2017, currently owns and manages five office buildings in prime locations, two in Sofia and three in Bucharest. The company aims to expand its portfolio to the rapidly growing logistics and light industrial market in the Central and Eastern Europe (CEE) region, targeting key transportation hubs in Romania and Bulgaria.

Old Mutual Property, a division of the South African financial conglomerate Old Mutual Limited, and the AG Capital (AGC) Group, a leading regional real estate group, are the majority owners of LHI. The €150 million investment package comprises a long-term senior secured loan of €45 million from IFC’s own account, a long-term senior secured loan of €65 million from IFC acting as the implementing entity for the Managed Co-Lending Portfolio Program, and a convertible instrument of €40 million from IFC’s own account.

The financing will be allocated towards the acquisition of income generating assets and the development of new projects in the logistics and light industrial market (€140 million), as well as partial refinancing and refurbishment of the existing office portfolio (€110 million). The project assets are spread across Romania and Bulgaria, including the capital cities of Bucharest and Sofia, as well as their surrounding counties and other key hubs in the two countries.

The investment is expected to have a significant positive impact by improving access to modern and high-quality logistics and business infrastructure, as well as through the development of green-certified buildings. This is set to enhance financial integration in the commercial and warehousing property sector of Bulgaria and Romania, according to IFC.

In addition to the financial support, the IFC loans incorporate sustainability-linked features based on the EDGE Advanced certification of the funded warehousing properties. This move marks LHI’s first engagement with sustainability-linked loans (SLL). IFC will also provide non-financial assistance by assisting LHI in elevating its sustainability reporting and corporate governance.

By offering this financing package to Lion’s Head Investments, IFC aims to promote sustainable development and bolster the real estate sector in Bulgaria and Romania, while also fostering economic growth in the CEE region.

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