Hungary: OTP Green Energy Capacity Expansion Bond Investment (AIIB-000835)

Countries
  • Croatia
  • Hungary
  • Serbia
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Infrastructure Investment Bank (AIIB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
U
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Apr 17, 2024
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
OTP Bank Plc.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 200.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ AIIB website

Updated in EWS Aug 24, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the objective of this project is to increase the capacity of renewable energy generation and improve energy efficiency in targeted countries (Croatia, Hungary, and Serbia).

The Project constitutes an up to USD200 million AIIB investment into MREL-eligible Senior Preferred bond(s) to be issued by OTP Bank. Proceeds from the issuance(s) will be allocated to eligible loans to support climate change mitigation in Croatia, Hungary and Serbia under OTP's Sustainable Finance Framework.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The Project is assigned Category FI under the ESP as it involves financing through a financial intermediary.

ES risks and impacts anticipated by the Project are related to small- to mid-size energy efficiency and renewable energy investments and, more specifically, to construction and operation, health and safety, labor and working conditions, pollution prevention, biodiversity, and waste management. Land acquisition (potential resettlement) issues, stakeholder engagement, information disclosure, and grievance redress will be implemented with the Bank's ESP. Moreover, OTP's ESRMF screens out subprojects with high ES risks, all category A activities per AIIB ESF definition as well as hydro will be excluded.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

An up to USD200 million AIIB investment into MREL-eligible Senior Preferred bond(s) to be issued by OTP Bank.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

OTP Bank Group is the largest commercial bank of Hungary and one of the largest independent financial service providers in Central and Eastern Europe, with banking services for private individuals and corporate clients.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

PROJECT TEAM LEADER

Asian Infrastructure Investment Bank

Yulia Rusanova

Investment Officer - Financial Institutions & Syndication

yulia.rusanova@aiib.org

BORROWER

OTP Bank Plc.

Gábor Fazekas

Director, Markets Department

gabor.fazekas@otpbank.hu

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.aiib.org/en/contact/information-request/index.html

ACCOUNTABILITY MECHANISM OF AIIB

The AIIB has established the Accountability Mechanism for Project-Affected People (PPM). The PPM provides Òan opportunity for an independent and impartial review of submissions from Project-affected people who believe they have been or are likely to be adversely affected by AIIBÕs failure to implement the ESP in situations when their concerns cannot be addressed satisfactorily through Project level GRMs or AIIB Management processes.Ó Two or more project-affected people can file a complaint. Under the current AIIB policy, when the bank co-finances a project with another development bank, it may apply the other bank's standards. You can refer to the Project Summary Information document to find out which standards apply. You can learn more about the PPM and how to file a complaint at: https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/how-we-assist-you/index.html

The complaint submission form can be accessed in Arabic, Bahasa Indonesia, Bengali, Chinese, English, Tagalog, Hindi, Nepali, Russian, Turkish, or Urdu. The submission form can be found at: https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/submission/index.html

How it works

How it works