EBRD invested EUR 16 million (16% of the issuance amount) in senior preferred bonds issued by AS LHV Group ('LHV') as part of a public issuance of EUR 100 million to be listed on Euronext Dublin. The bonds have a four-year maturity with a call option on the third year.
The project supports the resilience and regulatory compliance of the largest domestic financial services group in Estonia and contributes to the development of the capital market. The project aims to support strong green-impact targets with 150% 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: 61
The project's expected transition impact derives from its contribution to the Resilient and Green transition qualities.
Resilient - by helping LHV to diversify its funding sources through capital market issuances and closing the regulatory funding gap by issuing regulatory compliant senior preferred bonds. Furthermore, the project contributes to capital market developments by expanding the range of investable instruments by Estonian issuers.
Green - LHV will allocate 150% of EBRD's investment for financing green projects in line with the EBRD's GET eligibility criteria for Estonia.
AS LHV GROUP
LHV is the largest domestic financial-services group in Estonia, providing banking, asset management and insurance services. The company is listed on the Tallinn Stock Exchange and operates through digital channels with a 10 per cent share of the Estonian lending market
EBRD Finance Summary
Total Project Cost
The project depicts strong additionality by i) supporting LHV to issue sizeable senior preferred bonds in capital markets, (ii) supporting LHV to widen the investor base by sending a positive signal to the investors, and (iii) encouraging LHV's green agenda by promoting financing of green projects in line with EBRD's GET criteria.
Environmental and Social Summary
Categorised FI (ESP 2019): EBRD has an existing client relationship with the Group's banking subsidiary (AS LHV Pank). LHV Group will need to comply with PRs 2 and 4, apply PR9 to the allocation of EBRD funding to green projects. ESD will support LHV in the establishment of the ESMS. For the GET-eligible funding, the E&S eligibility criteria for renewable energy projects will have to be applied where applicable. LHV will be required to submit to the Bank its annual environmental and social reports.
Technical Cooperation and Grant Financing
Company Contact Information
+372 680 2756
TARTU MNT 2, TALLINN 10145
PSD last updated
16 Sep 2021
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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 firstname.lastname@example.org. 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 email@example.com to get guidance and more information on IPAM and how to submit a request.