MKB becomes regular borrower in international market of sustainable financing


Credit Bank of Moscow (MKB) has raised a second ESG-linked loan from Landesbank Baden-Wuerttemberg (LBBW), one of the leaders of green banking in Europe.
The bank raised its debut ESG-linked loan (a loan tied to the ESG rating) in December 2020 – that deal was the first for the Russian banking sector. 
With the second such facility, sustainable funding instruments have become one of the strategically important regular sources of liabilities for MKB. This also underlines the importance attached to the ESG agenda in the bank's strategy and its ambition to excel in sustainability.
The new loan's ESG element is the evaluation of MKB's progress in sustainable development as rated by the rating agency RAEX Europe. If the bank's ESG rating is upgraded during the loan's lifetime, its interest rate will decrease. 
The USD 10 mln loan matures in 2 years – such comparatively long maturities are characteristic of sustainable instruments, motivating borrowers to achieve meaningful long-term ESG results. 
"Raising ESG funding becomes standard practice for the bank, and this is important to us. An instrument linked to the ESG rating is a strong incentive for MKB to actively develop further – and not in a single area, like, for example, in the case of "green" instruments, but comprehensively across all of the E, S and G components. Raising sustainable funding is now a priority for us, as it enables us not only to attain common corporate goals, but also to do more for the environment and the society. We see a strong potential to expand further our international ESG funding by partnering with a wider circle of international ESG-advanced banks and by diversifying sustainable instruments of funding," commented Elena Finashina, head of MKB's Sustainable Development Division.