The EBRD invested CZK 1.323 billion (EUR 53.5 million equivalent or 22% of the issuance amount) in a Senior Non-Preferred bond (the "Bond") issued by Ceska sporitelna, as part of a local issuance of CZK 6 billion, which will be listed on the Prague Stock Exchange. This Bond is eligible to meet the regulatory minimum requirements for own funds and eligible liabilities (MREL). The Bond has a maturity of 5 years, with a call option after 4 years.
The Project supports a green economic recovery in the Czech Republic and the resilience of a systemically important bank in Czech Republic, and contributes to the local capital market development. The Project also aims to support strong Green-impact targets with at least 120% of the EBRD's investment to be allocated to finance green projects in line with EBRD's Green Economy Transition ("GET") eligibility criteria.
ETI score: 57
The expected transition impact stems from its contribution to the Resilient and Green qualities:
Resilient: The Bond will contribute to (i) the resilience of the local banking sector and of a systemic financial institution - by building up its loss absorption capacity to meet regulatory requirements; and (ii) capital market development - by facilitating the introduction of a new debt instrument, the first bail-in-able instrument (SNP bond) - on the local capital market, and in local currency.
Green: The Project will support EBRD's Green Economy Transition (GET) approach in the Czech Republic, through Ceska sporitelna allocating 120% of EBRD's investments to GET-eligible projects further promoting the green agenda in Czech Republic.
CESKA SPORITELNA AS
Ceska sporitelna is the second largest bank in the Czech Republic with 19% market share by total assets as of end 2021, and is classified as other systematically important institution (O-SII) in the Czech Republic. Ceska sporitelna is a wholly owned subsidiary of Erste Group Bank AG. It is rated A (stable) by Fitch, A1 (stable) by Moody's, and A (positive) by S&P.
EBRD Finance Summary
Total Project Cost
The Project depicts strong additionality by supporting Ceska sporitelna to issue its first CZK-denominated SNP bond on the local market, with EBRD's participation facilitating further mobilisation of stable, long-hold institutional investors.
The Project also involves standard-setting in the request to allocate 120% of EBRD participation proceeds to GET-eligible projects meeting certain demanding standards and certification requirements. This helps Ceska sporitelna to promote green projects and enhance awareness and deployment of funds in this area and sets a market example for sustainable finance.
Environmental and Social Summary
Requirements 2, 4 and 9, comply with the EBRD's Environmental and Social Risk Management Procedures as appropriate for the type of investment they undertake and submit annual environmental and social reports to the Bank. Renewable energy projects financed with EBRD's use of proceeds will need to follow the E&S Eligibility Criteria for such projects and Ceska sporitelna will be expected to report on compliance with these annually. The GET share for this project is 100%.
Technical Cooperation and Grant Financing
Company Contact Information
Ceská sporitelna, a.s. Budejovická 1518/13a,b Praha 4, 140 00 Czech Republic
PSD last updated
19 Jul 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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