Croatia Sustainability Linked Bond ZG Holding 1440X810

Improving sustainability in Zagreb


With sustainability a major concern across Europe, the people of Zagreb in Croatia are in line to benefit from important improvements in the areas of waste and renewables – thanks to work carried out by Zagrebačka banka.

The bank acted as Joint Lead Manager for a Sustainability-linked bond (“SLB”) issued by Zagrebački holding (“Issuer”), a multi-utility company fully owned by the City of Zagreb. The bond is the largest non-sovereign bond placed in the Croatian debt capital market and the first ESG bond in CEE issued by a municipal or municipal-related issuer. The 5-year SLB was issued for €305 million and listed on the Zagreb Stock Exchange (4.94% yield and 4.9% coupon was set at issue).

Under the terms of the bond, the Issuer has committed to delivering improvements in two key areas of sustainability. Firstly, an increase in the separation of municipal waste to 58% by 2027 against a 2021 baseline of 37%. Secondly, an increase in the consumption of electricity from renewable sources to 70% by 2028, against a 2023 baseline of 50%. These targets are set out in the bond’s framework and will be reviewed by S&P Global Ratings.

Man doing a presentation

This is the first 'sustainable' bond on the domestic capital market from the public sector, and the first such bond issued by a utility company in Central and Eastern Europe, which attracted a significant interest from the investors. I believe in successful execution of the plans related to the bond and that it will contribute to a greater use of renewable energy sources and waste sorting. Congratulations to everyone who participated in this important project.”

Tomislav Tomašević

Mayor of Zagreb

This issue by which we refinance the outstanding bond, Zagrebački Holding has been preparing for a long time, while defining numerous sustainability projects related to the bond, primarily for greater use of renewable energy sources and achieving a higher percentage of waste sorting. We are satisfied that, in addition to domestic investors, international ones, such as the EBRD and the IFC, have joined and that the transaction was closed with great success. We hope that it will also contribute to trading on the stock exchange.”

Ivan Novaković

CEO of Zagrebački Holding

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