Zagreb, Croatia, October 6, 2022—IFC invested €130 million in Croatia's first sustainable bond issued by Raiffeisen bank Austria d.d. (RBA), a member of Raiffeisen banking group, to promote greater market resilience and foster a sustainable economy.
The investment will support RBA's first-ever issuance under a sustainability bond framework that is aligned with the International Capital Market Association (ICMA) Sustainability Bond Guidelines. It includes both social and green bond guidelines, with use of proceeds earmarked for social projects—employment generation and protection of micro, small and medium-size enterprises financing, as well as climate finance—green buildings, renewable energy, clean transportation, etc.
"I am proud of this issuance of the Sustainability Bond from the recently established Sustainability Bond Framework. The funds raised by issuing this senior preferred bond will be redirected to financing green and social projects from the spheres of energy efficiency and renewable energy sources, healthcare, education, base infrastructure, and affordable housing. In doing so, we continue to strengthen internal and external sustainability and support the realization of the UN Sustainable Development Goals," said Liana Keserić, president of the Board RBA Hrvatska.
The bonds are expected to qualify for the European Union's Minimum Requirement for own funds and Eligible Liabilities (MREL) in line with the European Union's Banking Recovery and Resolution Directive (BRRD). This is RBA's second issuance of MREL-eligible bonds and IFC's second investment in MREL-eligible bonds issued by a bank in Croatia, following the €75 million investment in Erste Bank's bonds issuance in June 2021.
"IFC's priority in Croatia is to help the country strengthen and diversify its financial sector through new engagements that support access to sustainable finance and the capital markets development agenda," said Ary Naïm, IFC's Regional Manager for Central and Southeast Europe. "With this project, we hope to boost the resilience of the financial sector, promote a dynamic corporate bond market, and catalyze other private sector players to invest in sustainable financial instruments."
The World Bank Group's Climate Change Action Plan aims to deliver record levels of climate finance to developing countries, reduce emissions, strengthen adaptation, and align financial flows with the goals of the Paris Agreement. As part of this plan, IFC will align 85 percent of new direct investments with the objectives of the Paris Agreement starting July 1, 2023, and 100 percent of these investments starting July 1, 2025.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About RBA
Raiffeisenbank Austria d.d. (RBA) started its work in 1994 and is the first bank in Croatia established with foreign capital. The RBA is part of a strong international financial group and is 100 per cent owned by Raiffeisen Bank International AG in Vienna. RBA offers clients a complete assortment of banking and other financial services through members of the Raiffeisen Group in Croatia, which consists of Raiffeisen Leasing, Raiffeisen company for the management of mandatory and voluntary pension funds, Raiffeisen pension insurance company and Raiffeisen Consulting. Raiffeisen Group in Croatia has a comprehensive offer of pension companies – funds in Pillars II and III and a pension insurance company. Raiffeisen Bank operates through 66 branches located in 36 Croatian cities.
