Raiffeisen Romania sustainability bond investment

Location:

Romania

Project number:

53776

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

20 Jul 2022

Status:

Signed

PSD disclosed:

18 Aug 2022

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The EBRD invested RON 131.3 million (ca. EUR 26.7 million) in a senior non-preferred sustainability bond issuance of RON 500.9 million launched by Raiffeisen Bank S.A., a commercial bank incorporated in Romania, on 10 August 2022. The bond has a 5-year maturity, with a call option after the fourth year, and is listed on the Luxembourg and the Bucharest Stock Exchanges. Proceeds of the sustainability bond will be used for eligible green and social projects in line with Raiffeisen Bank's sustainability bond framework. This is the first sustainability bond issued in Romania.

The EBRD further invested RON 58.8 million (ca. EUR 11.9 million) in a senior preferred sustainability bond issuance of RON 325.5 million launched by Raiffeisen Bank on 11 October 2022. The bond has a 5-year maturity, with a call option after the fourth year, and is listed on the Luxembourg and the Bucharest Stock Exchanges. Proceeds of the sustainability bond will be used for eligible green and social projects in line with Raiffeisen Bank's sustainability bond framework.

Project Objectives

The project contributes to the resilience of a systemic bank in Romania, facilitates capital market development in the country, expands access to finance for SMEs from underdeveloped regions, and supports the first ever sustainability bond framework launched by a Romanian bank, that is aligned with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines of the International Capital Market Association.

Transition Impact

ETI score: 61

The project delivers transition impact through the Resilient quality, as it (i) promotes capital market development in Romania by introducing the first sustainability bond issued out of the country and through facilitating the expansion of the market for new instrument types and for instruments in local currency; and (ii) contributes to RBRO's bail-in-able funding base and strengthens the bank's resilience and regulatory compliance. The project also supports the Inclusive transition quality by supporting the inclusion of underserved segments, including SMEs from underdeveloped regions, through enhanced access to finance.

Client Information

RAIFFEISEN BANK SA

Raiffeisen Bank S.A. is the fifth largest bank in Romania with a market share of 9.4% in terms of total assets as of year-end 2021. On a consolidated basis, Raiffeisen Bank reported total assets of EUR 12.1 billion and total equity of EUR 1.1 billion as at the same period. The bank is classified as an "other systemically important institution" and is rated Baa1 (Stable) by Moody's. Raiffeisen Bank International AG owns 99.92% of Raiffeisen Bank S.A.

EBRD Finance Summary

EUR 110,271,819.14

RON 190,050,000.00 (ca. EUR 38.6 million)

Total Project Cost

EUR 1,165,351,588.75

RON 826,350,000.00 (ca. EUR 167.9 million)

Additionality

The project is additional in terms of financing structure and risk mitigation. Additionality derives from supporting the successful issuance in a still shallow capital market and in a post-pandemic environment destabilised by inflationary pressures and the war on Ukraine. The Project also involves promoting the incorporation of best market standards and practice in RBRO's Sustainability Bond Framework.

Environmental and Social Summary

Categorised FI (ESP 2019). Raiffeisen Bank S.A. is an existing client of the Bank. RBRO will be required to continue to apply its current E&S framework to ensure on-going compliance with the EBRD's Performance Requirements 2, 4 and 9 and to provide annual E&S report to the EBRD. Any renewable energy projects financed under the project will need to comply with EBRD's E&S eligibility criteria for wind, hydro, solar, geothermal or biomass projects, as applicable.

Company Contact Information

Romulus Mircea
romulus.mircea@raiffeisen.ro
+40 733 104 293
+40 21 230 0700
http://www.raiffeisen.ro
Calea Floreasca 246D Bucuresti 014476

PSD last updated

26 Oct 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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