The European Bank for Reconstruction and Development (EBRD) has announced a 72.5 million-euro investment in a 305 million-euro “sustainability-linked” bond (SLB) issued by Zagrebacki Holding, the first SLB issued by a local municipality or public-sector company in Croatia (12 July).
Zagrebacki Holding is the country’s largest utility company, responsible for water supply and wastewater collection, solid waste management, road maintenance, public surfaces maintenance, gas distribution, parking and other communal services in Zagreb through a network of branches and subsidiaries.
Issuers of SLBs commit to achieving specific sustainability performance targets. If these are not met, they have to pay a financial penalty. As part of this new issue, Zagrebacki Holding will work on specific targets related to municipal waste management and increasing renewable energy as a share of Zagreb’s total electrical energy consumption, the EBRD said via a press release.
The issue is dated 11 July 2023, with a bullet repayment and five-year maturity. The bond has a yield of 4.94 per cent and a fixed interest rate of 4.90 per cent, paid semi-annually.
“We are proud to support Zagreb Holding’s sustainability-linked bond as the first instrument of its type issued by a local public-sector company in Croatia. The EBRD stands ready to continue supporting Zagreb Holding and the City of Zagreb on their sustainability path,” said Victoria Zinchuk, EBRD Director for Central Europe.
This is the EBRD’s second SLB in Croatia. The bank has also provided support to other financial instruments in Croatia such as the country’s first sustainability bond issuance last year.
Last week, EBRD President Odile Renaud-Basso and Zagreb Mayor Tomislav Tomašević also discussed potential future cooperation on energy efficiency in public buildings and urban regeneration initiatives.
