Investment in Luminor Bank's Covered Bonds



Project number:


Business sector:

Financial institutions

Notice type:


Environmental category:


Approval date:

11 Dec 2019



PSD disclosed:

09 Mar 2020

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

Investments of up to EUR 125 million in a series of covered bonds issued by Luminor Bank

AS in Estonia ("Luminor") under the Euro Medium Term Note and Covered Bond Programme ("Programme") over a period of 3 years and admitted for trading in the Irish Stock Exchange. EBRD's investment in each issue will be limited to 20% of the issue size.

On 4 March 2020, EBRD invested EUR 28 million in the first covered bond issuance of EUR 500 million under the Programme.

On 11 May 2022, EBRD invested EUR 97 million in the second issuance of EUR 500 million under the Programme.

Project Objectives

The objective of the project is to support the establishment of a new capital market instrument in the Baltic Countries. The project supports the first ever issuance of covered bonds in the Baltic States and it is fully consistent with Bank's policy engagement, aimed at development of regional capital markets in the Baltic Countries.

Transition Impact

ETI score: 65

The project supports the resilience of the financial sector and markets by (i) increasing the supply of investable listed instruments for local and international investors (i.e. covered bonds and the Pan Baltic Covered Bonds), and (ii) helping Luminor diversify the funding sources and improving the asset liability mismatch.The Well-governed quality is underpinned by the EBRD's extensive policy dialogue on the development and integration of the capital markets in the Baltic Countries; which, among other, include (i) supporting Estonia (as well as Latvia and Lithuania) to develop the covered bond legislation, and (ii) the development of the Pan-Baltic Covered Bond Framework that will facilitate the issuance of Pan-Baltic Covered Bonds.

Client Information


Luminor was established in October 2017 through the merger of Nordea Bank Abp and DNB

Bank ASA in the Baltic Countries. Based in Estonia, it is the third largest banking group in the Baltic Countries with a market share of 16.7% in lending across the Baltic Countries. In October 2019, a consortium of private equity funds managed by Blackstone acquired a majority stake in Luminor. It is a systemic bank directly supervised by the European Central Bank ("ECB").

EBRD Finance Summary

EUR 125,000,000.00

For the first covered bond issuance, EBRD invested EUR 28 million.

For the second issuance under the Programme, EBRD invested EUR 97 million.

Total Project Cost

EUR 1,000,000,000.00

The size of the first covered bond issuance was EUR 500 million and the size of the second issuance under the Programme was EUR 500 million

The total size of the Programme is EUR 5 billion.


Endorsing a newly developed asset class and innovative structure of Pan Baltic Covered Bond consistent with policy engagement, supporting benchmark size issuances from a relatively new issuer in the international capital markets, providing comfort to other investors given the Bank's role as a significant investor in covered bonds.

Environmental and Social Summary

Categorised FI. Luminor is an existing client and an E&S Management Plan has been developed to assist Luminor in their implementation of the EBRD ESP's PR9. Luminor is required to comply with PRs 2, 4 and 9; implement relevant EBRD Environmental and Social Risk Management Procedures and submit annual reports to EBRD.

Technical Cooperation and Grant Financing


Company Contact Information

Nick Turnor
+372 5306 7820
Luminor Bank A.S. Liivalaia 45 10145 Tallinn Estonia

PSD last updated

18 May 2022

Understanding Transition

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

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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 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.

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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).

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 to get guidance and more information on IPAM and how to submit a request.


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