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

The International Finance Corporation (IFC), a member of the World Bank Group, has proposed a sustainability-linked financing package of €150 million to support Lion’s Head Investments AD (LHI), a commercial property investment platform in Bulgaria and Romania.

The investment will be used for the acquisition and development of logistics assets, as well as the partial refinancing and capital expenditure of the existing office portfolio.

The logistics assets are expected to be certified with the IFC’s Advanced Excellence in Design for Greater Efficiencies (EDGE) green building certification.

LHI, established in 2017, currently owns and operates five office buildings situated in prime locations, two in Sofia and three in Bucharest.

The company has plans 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.

LHI is majority owned by Old Mutual Property, part of the South African financial conglomerate Old Mutual Limited, and the AG Capital (AGC) Group, a leading regional real estate group.

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 used 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 located in both Romania and Bulgaria, including the capital cities of Bucharest and Sofia, as well as their surrounding counties/provinces and other key hubs in the two countries.

The investment is expected to have significant positive effects by increasing access to modern and high-quality logistics and business infrastructure, and through the development of green-certified buildings.

This is expected to promote greater financial integration in the commercial and warehousing property sector of Bulgaria and Romania via demonstration and replication channels, IFC said.

The IFC loans incorporate sustainability-linked features based on the funded warehousing properties’ EDGE Advanced certification. This marks LHI’s first sustainability-linked loan (SLL) engagement.

IFC will also provide non-financial additionality by helping LHI elevate its sustainability reporting and corporate governance.

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