The European Bank for Reconstruction and Development (EBRD) has invested €50 million in a €400 million senior preferred bond issued by Erste & Steiermärkische Bank (EBC), one of Croatia’s leading financial institutions. The investment reflects the EBRD’s continued commitment to strengthening Croatia’s financial sector while promoting sustainable economic development and environmental sustainability. Through this transaction, the EBRD aims to support both capital market growth and the country’s transition toward a greener economy.
The bond is listed on both the Zagreb Stock Exchange and the Vienna Stock Exchange, providing EBC with access to domestic and international investors. Dual listing enhances the visibility and attractiveness of Croatian financial instruments, helping integrate Croatia’s financial markets with broader European capital markets. This increased market access can improve liquidity, attract new investors, and strengthen confidence in the country’s financial system.
One of the key objectives of the investment is to support the development of Croatia’s domestic capital market. By increasing the availability of benchmark financial instruments, the transaction contributes to market depth and encourages greater participation from investors. Stronger capital markets provide businesses and financial institutions with additional funding opportunities, reducing reliance on traditional bank financing and promoting a more diversified financial ecosystem.
The investment is also expected to encourage further bond issuances and listings within Croatia. As more companies and financial institutions access capital markets, the country can benefit from enhanced financial stability, improved investment opportunities, and increased competitiveness. The development of well-functioning capital markets is considered an important component of long-term economic growth and resilience.
For Erste Bank Croatia, the bond issuance helps diversify funding sources and strengthen financial resilience. Access to a broader range of financing options enables the bank to manage risks more effectively while maintaining its capacity to support lending activities. Diversified funding structures are particularly important during periods of economic uncertainty and changing market conditions.
A significant aspect of the transaction is its contribution to Croatia’s green transition. Under the agreement, Erste Bank Croatia will allocate an amount equal to 140 percent of the EBRD’s investment toward financing environmentally sustainable projects. This commitment aligns with the EBRD’s Green Economy Transition (GET) approach, which promotes investments that reduce environmental impacts and support climate resilience.
The green financing generated through this initiative is expected to support projects in areas such as renewable energy, energy efficiency, and sustainable infrastructure. These investments can help reduce greenhouse gas emissions, improve energy performance, and accelerate Croatia’s progress toward national and international climate objectives. Expanding access to green finance is increasingly recognized as a critical factor in achieving sustainable development goals.
The investment also strengthens the long-standing partnership between the EBRD and Erste Bank Croatia. As the fourth investment made by the EBRD under the bank’s bond programme, the transaction demonstrates continued confidence in EBC’s role in supporting economic development and sustainable financing within Croatia. Long-term partnerships between development institutions and commercial banks help mobilize capital for strategic economic priorities.
Beyond its environmental benefits, the transaction contributes to broader economic development by supporting private-sector growth and improving financial market infrastructure. Strong financial institutions and active capital markets are essential for attracting investment, fostering innovation, and creating opportunities for businesses and individuals.
The investment reflects the EBRD’s broader commitment to Croatia, where it has invested more than €5.2 billion across 278 projects. By supporting capital market development, sustainable finance, and green investments, the EBRD continues to play a significant role in strengthening Croatia’s economy while helping the country advance toward a more resilient, competitive, and environmentally sustainable future.
