EBRD invests in first green bond issued by Erste Croatia

The European Bank for Reconstruction and Development (EBRD) has invested €35 million in a green bond issued by Erste & Steiermärkische Bank (ESB), the Croatian subsidiary of Austria’s Erste Group Bank AG, which is part of a €400 million international issuance listed on the Vienna Stock Exchange.

The new issuance is the first green bond ever placed by a bank in Croatia. ESB will allocate an amount equivalent to the net proceeds of the bonds exclusively to finance eligible green projects in accordance with Erste Group’s Sustainable Finance Framework published in April 2021.

The investment combines three of the EBRD’s strategic goals in Croatia: (i) strengthening the local capital market, (ii) supporting the resilience of the banking sector and (iii) developing the green economy. The issuance will support ESB’s regulatory compliance, contribute to the diversification of its funding base and increase its loss-absorption capacity and resilience. The issuance will also promote the green agenda in Croatia.

The bond contributes to ESB’s compliance with the regulatory minimum requirement for own funds and eligible liabilities (MREL), allowing the EBRD to directly facilitate the resilient growth of operations by one of Croatia’s largest banks. This investment also marks the EBRD’s sixth purchase of an MREL-eligible bond issued by a Croatian bank, of which three have so far been in support of ESB.

To date, the EBRD has invested more than €4.7 billion in Croatia across 248 projects.