The Asian Infrastructure Investment Bank (AIIB) said it has committed up to $125 million (106 million euro) to invest in Tier 2 bonds issued by Hungary's OTP Bank, aiming to boost climate finance and support low-carbon investments across Hungary, Croatia, and Serbia.

The agreement creates a common framework for the partnership, building on AIIB's $200 million investment approved in 2024 in OTP Bank's MREL-eligible senior preferred bond, AIIB said in a press release on Friday.

OTB Bank will allocate the proceeds from the AIIB investments to eligible green sub-loans supporting renewable energy generation, energy efficiency improvements and other climate-aligned sub-projects.

In Croatia, OTP Bank is the fourth largest lender with total assets of 8.7 billion euro ($10.2 billion). It has more than 100 branches across the country, it says on its website. In Serbia, OTP Bank is the second largest in terms of assets, equaling 1 trillion dinars ($10 billion/ 8.5 billion euro), with over 153 branches in the country.