Societe Generale (SocGen) and the International Finance Corporation (IFC) have entered into a Collaboration Framework Agreement aimed at enhancing sustainable finance initiatives in developing nations.
This agreement was formalized during the World Economic Forum’s annual meeting in January and focuses on facilitating project co-financing and risk-sharing arrangements. These efforts are designed to encourage private sector participation in the climate transition.
The initiative prioritizes projects that promote access to clean energy and water, support sustainable agribusiness, and empower women-led small and medium-sized enterprises (SMEs).
On April 4, the IFC and SocGen’s Romanian subsidiary announced their first transaction under this agreement—a synthetic “significant risk transfer” (SRT) designed to unlock capital for sustainable ventures. This transaction marks a significant milestone, being the IFC’s first SRT in Romania and SocGen’s inaugural SRT in any emerging market. The IFC will provide a guarantee of up to €105 million against a €700 million portfolio of SME and corporate loans managed by BRD. The freed-up capital is expected to contribute up to €315 million toward financing climate-related projects and women-owned businesses.
Slawomir Krupa, CEO of Societe Generale, stated, “By partnering with the IFC, we aim to enhance our role in supporting sustainable initiatives in developing countries, aligning with the UN’s Sustainable Development Goals (SDGs). Forming strategic partnerships with key stakeholders is essential for us to devise effective solutions to the challenges posed by the environmental transition and the necessity for sustainable infrastructure in these regions.”
Makhtar Diop, Managing Director of the IFC, added, “This agreement paves the way for us to collaborate in mobilizing scalable private sector investments in emerging markets. We eagerly anticipate an enhanced partnership that will deliver critical financing for projects that can transform lives and economies.”
According to S&P Global Market Intelligence, SRT activity is on the rise as banks seek regulatory capital relief and aim to manage risk exposures effectively.
Over the past decade, the IFC and SocGen have collaborated on approximately 60 transactions, resulting in around $20 billion in investments directed towards developing countries.
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