October 7 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Friday it is investing 60 million euro ($59 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 200 million euro.
“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 EBRD said in a press release.
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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.
“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,” Victoria Zinchuk, EBRD director for Croatia, said in the press release.
The EBRD’s share of investment in green projects in Croatia has more than doubled over the last four years to more than 60% of its annual investment. The bank’s green portfolio in Croatia now ranges from wind farms and insulation to sustainability financing instruments.
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.
The International Finance Corporation (IFC) said on Thursday that it has invested 130 million euro in Croatia's first sustainable bond issued by Raiffeisen bank Austria d.d. (RBA) to promote greater market resilience and foster a sustainable economy.
($ = 1.02 euro)
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