VTB plans to issue up to 20 billion rubles ($266.9 mn) as part of ESG lending program

VTB is developing a pilot lending program for large corporate clients to finance green projects and sustainable development. In 2022, the bank stands ready to issue subsidized ESG loans of up to 20 billion rubles ($266.9 mn).

Within the framework of “green” financing, the bank will provide loans for the implementation of projects that support the improvement of environmental performance, reduce the consumption of natural resources, as well as promote the use of renewable energy sources.

VTB has previously completed a number of transactions totaling more than 45 billion rubles ($601.2 mn) for project financing of solar and wind power plants. For example, the bank provided syndicated financing to the project company of the Wind Energy Development Fund, which is executing the construction of wind power plants in the Rostov Region, and financed the construction of solar power plants in Astrakhan and Transbaikal.

Yuri Soloviev, First Deputy President and Chairman of the Management Board of VTB, said:

“The ESG agenda is becoming a priority for Russian companies, we are seeing that our clients are actively developing various projects aimed at reducing negative impact on the environment, minimizing environmental risks and increasing energy efficiency. Their interest in ESG loans and financing of various ‘green’ initiatives on concessional terms continues to grow, and we are expanding our range of financial instruments and services with an ESG component. A significant impetus for the development of the green lending market is the introduction of regulatory incentives, as well as government support measures. Notably, currently banks are allocating the same amount of capital for concessional loans as they are for conventional loans. Taking into account the reduced rate at which ESG financing is issued, this often does not allow banks to achieve a sufficient level of return on capital. Regulation changes addressing this will have a positive effect on the development of the industry and the volume of new ‘green’ projects.”

Possible measures for regulating the development of ESG lending is one of the topics that will be discussed at the 13th VTB Capital Investment Forum “RUSSIA CALLING!” The forum will take place on November 30 — December 1 in an online format. The broadcasts of the sessions and the forum program can be found on the official website.