The European Bank for Reconstruction and Development (EBRD) sadi it has invested €72.5 million in a €305 million sustainability-linked bond (SLB) issued by Zagrebacki Holding, the first SLB issued by a local municipality or public-sector company in Croatia. Zagrebacki Holding is the country’s largest utility company, responsible for water supply and wastewater collection, solid waste management, road maintenance, public surfaces maintenance, gas distribution, parking and other communal services in the City of Zagreb through a network of branches and subsidiaries, EBRD said in a statemet.
Issuers of SLBs commit to achieving specific sustainability performance targets. If these are not met, they have to pay a financial penalty. As part of this new issue, Zagrebacki Holding will work on specific targets related to municipal waste management and increasing renewable energy as a share of Zagreb’s total electrical energy consumption.
The issue is dated 11 July 2023, with a bullet repayment and five-year maturity. The bond has a yield of 4.94 per cent and a fixed interest rate of 4.90 per cent, paid semi-annually.