Juraj Fuska
Managing Partner

Juraj is the managing partner and the Head of the Corporate/M&A and Banking/Finance team at CMS Slovakia (CMNO). Juraj is also a widely acclaimed capital markets and bank finance expert in Slovakia and has extensive experience, having advised on some of the most complex financing projects on the market. In the finance and capital markets sector, his client portfolio consists of the strongest local and regional financial institutions, senior lenders and international banks. He has worked on a wide range of international and domestic securities and capital markets transactions, including government, corporate, as well as covered bonds and IPOs and regulatory work. Juraj is adept at executing high-profile landmark capital markets transactions, including some of the first-ever and largest-ever deals of their kind in the Slovak market.

Zuzana Nikodémová
Counsel

Zuzana Nikodémová is a counsel in the Banking & Finance team at CMS Slovakia, with more than a decade of experience advising on diverse financing structures and financing regulatory matters, including AML compliance and factoring. She regularly advises a broad range of local and international clients on complex financing arrangements, including structured finance, regulatory compliance, and fintech innovations. Zuzana has extensive experience advising major financial institutions and corporate borrowers on complex domestic and cross-border transactions, including acquisition, project and real estate financings, corporate lending, syndicated financing and cash-pooling arrangements. Her particular sector expertise spans banking and financial services, projects and infrastructure, energy, real estate, construction and FinTech/E-payment.

Financing Slovak Infrastructure: Key Considerations Where a Non-EU Element Is Involved

Introduction

This article examines two recent legislative developments that may materially affect how non-EU capital participates in financing transactions in the project finance and infrastructure sectors. Operating on parallel but nevertheless converging tracks, these developments impact the work of practitioners advising non-EU lenders, sponsors, and investors active in the Slovak market.

First, the transposition of Directive (EU) 2024/1619 (“CRD VI”) into the Slovak Banking Act (Act No. 483/2001 Coll. on Banks) introduces, from 11 January 2027, a comprehensive third-country branch regime that will govern how non-EU credit institutions (“Non-EU Banks”) can conduct core banking activities—including lending funds and providing guarantees—in Slovakia. Second, Regulation (EU) 2026/1386 (the “New FDI Regulation”), published in the Official Journal on 26 June 2026 and applicable from 17 January 2028, will mandate pre-authorisation foreign direct investment screening across the EU, with particular relevance for infrastructure and financial-sector transactions involving non-EU investors or non-EU lenders.

For non-EU lenders and sponsors participating in Slovak project finance, the combined effect of CRD VI and the New FDI Regulation creates a regulatory environment that requires careful advance planning regarding market access, security package structuring, and transaction timetables.

1. The Third-Country Branch Regime under CRD VI and the Slovak Banking Act

Overview and Application Date

CRD VI amends Directive 2013/36/EU (“CRD”) and was required to be transposed into national law by 10 January 2026, although certain provisions (most notably, Article 21c governing the activities of Non- EU Banks) are subject to a deferred application date of 11 January 2027. The Slovak Banking Act has been amended accordingly. While several changes introduced by CRD VI are already in force, including expanded supervisory powers for the National Bank of Slovakia (the “NBS”), the substantive market-access restrictions for Non-EU Banks will apply only from 11 January 2027.

Core Prohibition and Licensing Routes

From 11 January 2027, Non-EU Banks will be prohibited from accepting deposits or granting loans or guarantees in the EU except through one of the following routes: (a) an authorised EU branch; (b) a subsidiary established in the EU; or (c) reliance on one of the express exemptions under CRD VI. Critically for project finance, a Non-EU Bank branch licence is territorially limited to the Member State that granted it. A Non-EU Bank with a branch licence in, e.g. Germany cannot rely on that licence to lend directly into a Slovak project financing project without either obtaining a separate Slovak branch licence or falling within an applicable exemption.

Relevant Exemptions

CRD VI provides a layered exemption structure. Where a Non-EU Bank holds an EU branch licence (in any Member State), it can provide cross-border services in another Member State under two exemptions:

• Reverse solicitation: the service is provided solely at the counterparty’s own exclusive initiative, and not where the counterparty has been solicited by the Non-EU Bank, any person having close links with it, any person acting on its behalf, or any person acting in their own name but for the benefit of the Non-EU Bank.
• Intragroup transactions: the counterparty belongs to the same group as the Non-EU Bank.

Where a Non-EU Bank has no EU branch or licence at all, two additional exemptions are available:

• Interbank exemption: the counterparty is another credit institution seated in the EU (relevant where a Non-EU Bank participates in a syndicated facility alongside EU-licensed banks).
• Ancillary services exemption: the Non-EU Bank is providing investment services in Slovakia and, concerning those services, performs ancillary deposit-taking or lending.

Grandfathering

Existing agreements concluded by a Non-EU Bank with its clients before 11 January 2026 benefit from transitional protection and will not be affected by the new restrictions. This is significant for legacy project finance facilities and infrastructure loan portfolios, but offers no comfort for new transactions and creates uncertainty regarding any post-deadline amendments to existing agreements (such as novations).

Slovak Gold-Plating

The Slovak transposition introduces requirements that are stricter than the CRD VI minimum harmonisation standard. The asset threshold for classifying a Non-EU Bank branch as a “Class 1” branch (subject to enhanced prudential requirements) has been lowered from EUR 5 billion to EUR 3.5 billion. Additionally, Class 1 branches are required to establish a Remuneration Committee. The explanatory memorandum to the amendments frames these measures as reflecting the size of the Slovak banking market and the objective of strengthening depositor protection.

Practical Implications for Non-EU Lenders

For non-EU lenders contemplating participating in Slovak infrastructure or project finance transactions, the key practical takeaways are that: (i) new loan commitments and guarantees will require either a Slovak branch licence, an EU subsidiary structure, or careful reliance on the narrow exemptions described above; (ii) the reverse solicitation exemption is construed strictly and is unlikely to provide a reliable basis for ongoing lending relationships; (iii) the interbank exemption may support syndicated structures where the Non- EU Bank’s counterparty is an EU-licensed credit institution acting as agent or fronting bank; and (iv) the lowered Class 1 threshold and Remuneration Committee requirement increase the regulatory cost of maintaining a branch presence in Slovakia relative to other EU Member States.

2. The New EU Foreign Direct Investment Screening Regulation

Scope and Application

Regulation (EU) 2026/1386 replaces the previous FDI framework (Regulation (EU) 2019/452) and applies from 17 January 2028. Unlike its predecessor, which merely encouraged Member States to establish screening mechanisms, the New FDI Regulation mandates national screening regimes with a pre-authorisation model for in-scope transactions. Slovakia will be required to ensure that its national screening mechanism meets the Regulation’s minimum standards by that date.

Extension to Intra-Union Investments

The New FDI Regulation introduces a critical expansion of scope for project finance practitioners: it extends to “intra-Union investments”; that is, investments made through an EU-established subsidiary that is directly or indirectly controlled by a non-EU investor. This means that a non-EU sponsor or investor cannot avoid FDI screening simply by channelling an investment through an EU holding company or SPV. Where the upstream ownership chain includes a non-EU controlling entity, the transaction remains within scope.

The Broad Definition of “Control” and Its Relevance to Security Packages

Recital 15 of the Regulation explains that “effective participation in management or control” arises not only where a foreign investor acquires decisive influence over the target, but also where the investor, without having a decisive influence, can “nonetheless materially impact its commercial policy, behaviour or decisions, for example through shareholding, voting rights, contracts, including leverage resulting from supplier relationships, and significant board representation.”

This definition is directly relevant to how lender security packages in project finance are structured. Share pledges that confer voting rights on enforcement, step-in rights that allow a lender or its nominee to assume the management of a project company, consent rights over material business decisions, and supplier leverage (particularly where the lender is also a supplier of goods or services to the project) could all potentially be characterised as conferring “effective participation in management or control.” Practitioners should carefully analyse whether security structures could inadvertently bring a non-EU lender within the definition of a “foreign investor” for FDI screening purposes, particularly on an enforcement event.

The current Slovak FDI Act (Act No. 497/2022 Coll. on FDI Screening) contains a carve-out for the, “establishment or creation of a security interest with respect to the target person, provided that such interest does not give a secured creditor which is a foreign investor any rights with respect to business decisions of the target person.” The reference to any rights regarding business decisions is broadly worded, as financing entities invariably hold certain rights under finance documentation, ranging from information rights to prior written approval rights in the case of material decisions. The Slovak Ministry of the Economy (the relevant FDI authority in Slovakia) has been preparing guidance on this point for several months since our initial enquiry, given that the scope of potential application could be very broad: apart from a non-EU lender and a non-EU foreign investor, the rules could also be triggered where the security agent is a non-EU entity or a Slovak entity providing security under non-EU financing. The Italian Cedacri case may serve as a relevant interpretive reference in this respect.

The Cedacri Case

In this case, the Italian appellate court overturned the first-instance decision that had upheld the practice of the Italian FDI authority in requiring FDI screening on the creation of a pledge on shares to secure financing, even where voting rights were not transferred until default.

The Italian appellate court ruled in favour of legal certainty and transparency, emphasising that the creation of a pledge does not alter corporate governance until voting rights are actually transferred. Such transfer is uncertain and contingent, not inevitable or current. The obligation to transfer voting rights arises only on default. In this case, the parties had contractually agreed to notify in the event of a default, thereby avoiding any automatic transfer of voting rights. On these grounds, the appellate court excluded any filing obligation at the time of the pledge was created, holding that notification is required only on enforcement or the actual transfer of voting rights.

Critical Infrastructure

As a related consideration, where the assets subject to security enforcement belong to a Slovak entity designated as critical infrastructure under Slovak Act No. 367/2024 Coll. on Critical Infrastructure, such enforcement must be notified to the relevant Slovak authority supervising the critical infrastructure in question. Typically, facility agreements relating to an entity that qualifies, or may in the future qualify, as critical infrastructure will contain notification and information obligations in favour of the finance parties.

Considering the Cedacri ruling and the enforcement notification requirement applicable to critical infrastructure, a principled argument can be made that FDI screening should likewise be triggered only on security enforcement or the exercise of voting rights by the secured parties, rather than on the initial creation of the security interest. However, it cannot be excluded that the Ministry of the Economy will adopt a more conservative approach.

3. Practical Conclusions: A Due Diligence and Structuring Checklist

Practitioners advising non-EU lenders and sponsors on Slovak project finance and infrastructure transactions should consider the following:

1. Regulatory analysis. Determine whether the non-EU lender requires a Slovak branch licence, can operate through an EU subsidiary, or can rely on a CRD VI exemption (most likely the interbank or reverse solicitation exemption) for the specific transaction. The legal basis for market access should be documented in the facility agreement.
2. Transitional protection. For facilities entered into before 11 January 2026, confirm that the agreements (and their amendments) benefit from transitional protection. For new facilities, plan market access compliance from the outset.
3. FDI screening assessment. Assess whether the target or project company falls within a mandatory screening sector (energy, transport, or digital infrastructure designated as critical). If yes, build the FDI pre-authorisation timeline into the transaction timetable.
4. Security package structuring. Analyse whether share pledges, step-in rights, consent rights, or supplier-related leverage could trigger a mandatory FDI screening obligation. Consider structuring limitations on enforcement rights (e.g. no voting rights before enforcement, time-limited step-in periods, or automatic divestiture obligations) to reduce the risk of inadvertently triggering a screening obligation.
5. Intra-Union investment structures. Do not assume that channelling an investment through an EU holding company eliminates the FDI screening risk. Where the ultimate beneficial owner is non-EU, the investment remains in scope.
6. Conditions precedent and longstop dates. Draft CPs to accommodate a minimum 45-day initial review plus the possibility of an in-depth investigation and EU cooperation mechanism referral. Longstop dates should account for the realistic worst case of potentially several months.
7. Call-in risk. Where a filing obligation is uncertain, err on the side of filing. The call-in power of up to five years post-closing creates material post-closing uncertainty if a required filing was not made.
8. Critical infrastructure. Implement notification/information obligations if the security provider is marked as critical infrastructure and consider the notification obligations to the authorities on enforcement in such case.