EBRD invests EUR 60 million in sustainability bond in Croatia

EnergyBusinessSouth-East European INDUSTRIAL Мarket - issue 4/2022 • 08.11.2022

EBRD invests EUR 60 million in sustainability bond in Croatia

The European Bank for Reconstruction and Development (EBRD) is investing EUR 60 million in a sustainability bond issued by Raffeisenbank Austria d.d. (RBA), the Croatian subsidiary of Austria’s Raiffeisen Bank International AG, by participating in a private placement of EUR 200 million.

This year, RBA became the first bank in Croatia to establish a sustainability bond framework, enabling it to issue both sustainability and green bonds in accordance with the International Capital Market Association’s guidelines for sustainability bonds. The new issue is the first sustainability bond ever issued by a bank in Croatia. RBA will invest the proceeds of the issue in Croatian projects that would be eligible under the EBRD’s Green Economy Transition (GET) approach.

“The RBA bond investment serves two of the EBRD’s strategic goals in Croatia: to strengthen the local capital markets and to develop the green economy. The EBRD’s share of investment in green projects in Croatia has more than doubled over the last four years to more than 60 per cent of its annual investment. The Bank’s green portfolio in Croatia now ranges from wind farms and insulation to sustainability financing instruments”, said Victoria Zinchuk, EBRD Director for Croatia.

The bond is also a type of eligible liability that enables RBA to absorb losses and restore its capital position, allowing it to continue its economic function during and after a crisis. Since joining the European Union’s Banking Union in 2020, Croatia has aligned its banking-sector regulations with the bloc’s directives and fully conforms to the global regulatory framework for more resilient banks, known as Basel III. This is the EBRD’s fourth purchase of such a bond in Croatia and the second associated with RBA. To date, the EBRD has invested almost EUR 4,3 billion in Croatia.