Participation with EUR 75 million in an eight-year tranche of Schaeffler AG's debut Schuldschein issuance, a type of German-law capital market instrument, to finance capital expenditure (capex) and R&D to develop production of components for the e-mobility business segment of Schaeffler in Hungary and the Slovak Republic.
The poject contributes to Schaeffler's global strategy to align its product mix with a low-carbon economy, which necessitates the electrification of road transport/mobility.
ETI score: 60
The transition impact is derived from the "green" transition quality. The project will contribute to the development and production of components essential for the electrification and decarbonisation of the mobility segment such as e-motors, e-axle drives and systems dedicated to fully electric vehicles with Schaeffler's products supplied to leading original equipment manufacturers (OEMs).
Schaeffler AG, headquartered in Herzogenaurach, Germany, is a leading automotive and industrial supplier. The company is listed on the Frankfurt Stock Exchange.
EBRD Finance Summary
The proceeds of the Bank's dedicated tranche will be used exclusively to support Schaeffler's R&D and capital expenditure in Hungary and the Slovak Republic eligible under the Bank's Green Economy Transition approach. The project is in line with Schaeffler's Green Finance Framework (conforming to ICMA Green Bond Principles and LMA Green Loan Principles, as confirmed by the qualified second party opinion) and will fall under its Clean Transportation category. Specifically, the Bank's financing will support R&D and the establishment of new production lines for e-mobility products and components including e-motors and e-axle drives and systems dedicated to fully electric vehicles.
Total Project Cost
Schaeffler's green Schuldschein debut issuance consists of EUR 300m green-labelled tranches focused primarily on refinancing of green projects in Western Europe under the company's ICMA GBP and LMA GLP-aligned Green Finance Framework; an additional EUR 75m tranche funded exclusively by the EBRD for making future green investments in Hungary and the Slovak Republic in line with the eligibility criteria of Schaeffler's Green Finance Framework; and tranches of EUR 47m funded by other investors used for general corporate purposes.
The EBRD's participation in the longest tranche of the issuance allows the company to increase the total size of green financing raised under the issuance and therefore accelerate its low-carbon investment programme. Furthermore, the project supports the company's commitment to e-mobility investments in Hungary and the Slovak Republic in the current environment.
In addition, the Bank's financing will be in line with the company's Green Finance Framework (conforming to ICMA Green Bond Principles and LMA Green Loan Principles), which will set an important precedent for other prospective issuers in the region.
Environmental and Social Summary
Category B (2019 ESP) and Low-Medium Risk. Due diligence on this capital markets transaction focussed on publicly available documentation, in particular the issuance documentation, the Sustainability Reports issued by the Company since 2016 and internet searches. To supplement these sources, a series of questions have been discussed with the client regarding the application of corporate level policies and procedures at the site level within the Bank's Countries of Operations (CoO's). The information reviewed has shown that the client has a sophisticated series of integrated Environmental, OHS and Stakeholder Engagement policies that are independently accredited at the corporate level, and at nearly all operational locations globally, including those in the Bank's CoO's. These policies and procedures are structured to address the key issues that are the subject of the Bank's Performance Requirements.
The client collates global EHSS performance data through a matrix management system and reports on this performance publicly, in line with the GRI Principles and in line with the EU requirements on reporting of non-financial risk. This latter requirement is also independently assured. The client will be required to maintain EHSS performance at the operating sites within the Bank's CoO's in line with the Performance Requirements and report to the Bank annually, confirming this level of performance.
Company Contact Information
Christian Metzler, Corporate Treasury, Head of Capital Markets & Funding Management
+49 9132 82-8227
+49 9132 82-7690
Schaeffler AG Industriestraße 1-3 91074 Herzogenaurach Germany
PSD last updated
14 May 2020
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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