On the 29th June 2022, the EBRD invested CZK 1.323 billion (EUR 53.5 million equivalent or 22% of the issuance amount) in a Senior Non-Preferred ("SNP") bond issued by Ceska sporitelna, as part of a local issuance of CZK 6 billion, listed on the Prague Stock Exchange. This Bond is eligible to meet the regulatory minimum requirements for own funds and eligible liabilities (MREL) and has a maturity of 5 years, with a call option after 4 years.
On the 24th August 2023, the EBRD participated with EUR 15 million (or 3% of the issuance amount) to the international Green SNP issuance by Ceska sporitelna - in total amount of EUR 500 million. The Green SNP bond is listed on Vienna Stock Exchange, eligible to meet the regulatory minimum requirements for own funds and eligible liabilities (MREL) and has a maturity of 4.5 years, with a call option after 3.5 years.
The Project contributes to a green economic recovery in the Czech Republic, helps the resilience of a systemically important bank in Czech Republic, and promotes the development of the local capital market.
The Project strongly supports the green agenda in Czech Republic by investing in issuances of Green Bonds i demonstrating support for the development of this still novel instrument on the local market, whilst for Bank's investments in bonds that are not in the Green Bond format, Ceska sporitelna will commit to allocate 120% of EBRD's participation to financing green projects in line with EBRD's Green Economy Transition ("GET") requirements.
ETI score: 67
The expected transition impact stems from its contribution to the Resilient and Green qualities:
Resilient: The Project will contribute to the resilience of the local banking sector and of a systemic financial institution, and to capital market development.
Green: The Project will support EBRD's Green Economy Transition (GET) approach in the Czech Republic, through Ceska sporitelna issuing the still novel Green Bond instruments and for Bank's investments in bonds that are not in the Green Bond format, allocating 120% of EBRD's investments to GET-eligible projects.
CESKA SPORITELNA AS
Ceska sporitelna is the second largest bank in the Czech Republic with 18% market share by total assets as of end-May 2023, and is classified as other systematically important institution (O-SII). 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 (negative) by S&P.
EBRD Finance Summary
EBRD Finance Summary: EUR 68.5 million
Total Project Cost
Total Project Cost: EUR 742.5 million
The Project depicts strong additionality by supporting Ceska sporitelna to issue its first CZK-denominated SNP bond on the local market, as well as continued SNP issuances on the local or international market to build its loss absorption capacity, 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, as well as participation to still novel green capital market instruments such as Green Bonds. 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
27 Sep 2023
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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