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Zagrebacki Holding Sustainability-Linked Bond



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

28 Jun 2023



PSD disclosed:

12 Jul 2023

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 EUR 72.5 million in the Zagrebacki Holding's (the "ZGH") EUR 305 million sustainability-linked bond ("SLB"). The bond has a 5-year maturity and was issued to refinance the ZGH's existing EUR 305 million bond issued in 2016 and 2017, in which the EBRD also invested.

The bond will be listed on Zagreb Stock Exchange.

Project Objectives

With its investment, EBRD supported the first SLB issuance by municipality / public sector in Croatia. The bond is aligned with the International Capital Market Association's (ICMA) guidelines for sustainability-linked bonds as verified independently by second party opinion provider. The bond will also support ZGH in improving the waste management practices and increasing a share of renewable energy consumption. The key performance indicators of the SLB are found to be relevant to the SLB principles and material. The Project supports local capital market development as well as ZGH's balance sheet restructuring, improving ZGH's resilience to external shocks and investment potential.

Transition Impact

ETI score: 60

The Project's transition impact derives from the following qualities:

Green: As a part of the Project, ZGH committed to implementation of the Sustainability Framework and Strategy, with the focus on two KPIs related to improvement in waste management and increase in share of renewable energy consumption.

Resilient: The Project contributes to the development of Croatian capital market by introducing a new instrument - the first municipality / public sector issuance of the SLB instrument on the local market. Given current market uncertainty, the Bank's participation further supports the Resilient quality by ensuring a successful placement of the bond, thereby helping to maintain investors' confidence in the local capital market.

Client Information


Zagrebacki Holding, a limited liability company, is the largest utility company in Croatia providing water supply and wastewater collection services, solid waste management, roads maintenance, public surfaces maintenance, gas distribution, parking and other communal services to the City of Zagreb's population through a network of its branches and subsidiaries.

EBRD Finance Summary

EUR 91,500,000.00

EUR 72,500,000.00 invested. 

Total Project Cost

EUR 305,000,000.00


The EBRD's participation is additional as it contributes to closing the funding gap by investing in an innovative instrument, provides comfort to other potential investors, and supports relevant market standard for the ESG components of the SLB.

Environmental and Social Summary

Categorised B in line with the EBRD's 2019 Environmental and Social Policy. The Project is a capital markets transaction (sustainability-linked bond). The Bank's in-house due diligence was based on publicly available information, review of the past due diligence and reporting by Zagreb City where Zagreb Holding was also assessed as a beneficiary, and additional documentation provided by ZGH. The available information allowed for an assessment of the ZGH's E&S capacity and environmental and social risks of this Project in accordance with the Bank's Performance Requirements (PRs). The use of proceeds is focused exclusively on refinancing of the previous bond used for municipal purposes and will explicitly exclude any new high-risk or category A projects. ZGH's Sustainability Linked Bond Framework is in line with the requirements of the ICMA's 2020 Sustainability-Linked Bond Principles (SLBP), as verified independently by second party opinion from S&P Global. In this SLB framework, ZGH is committing to future improvements in sustainability outcomes within a 5-year period through (i) improving separate municipal waste collection and preventing it from going to the landfill, and (ii) increasing use of renewable energy such as biogas and distributed solar.

The ESDD has reviewed the status of compliance and the Client's approach to environmental and social governance (ESG) principles and E&S capacity to implement the Bank's PRs and focussed on a corporate-level review of the Client's management systems, ZGH's Sustainability Strategy and decarbonisation efforts, and its current compliance status. ZGH has corporate management systems in place for environmental management and occupational health and safety in line with international standards, and it is working towards gradual greening and decarbonisation. The Client also is committed to corporate social responsibility and is proactively aligning their practices with ESG requirements and sustainability reporting in line with EU CSRD framework. Internal institutional capacity of ZGH will be further strengthened by establishing and staffing a separate unit responsible for overall ESG sustainability management by the end of 2023. Overall, ZGH's operational practices are in compliance with the national regulations.

The Environmental and Social Action Plan (ESAP) has been developed and agreed based on the findings of the ESDD, to structure the project in line with EBRD PRs and includes requirements relating to corporate-level management systems, some improvements in existing working practices such as traffic safety, designing and implementing a Paris Agreement-aligned decarbonisation strategy in line with existing leading practice and guidelines, and SLB KPIs related measures. ESAP will be included in the Framework Agreement with ZGH and the City of Zagreb. The Bank will monitor ZGH's performance through reviewing annual reports prepared by the Client and published on its website.

Technical Cooperation and Grant Financing


Company Contact Information

Marta Magic / Petra Arambasic
+385 (0)1 6420 000
Ulica grada Vukovara 41, 10000 Zagreb, Croatia

PSD last updated

12 Jul 2023

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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

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


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