EIB Group support for Croatia in 2017 close to EUR 600m; loans supporting Croatian environment and tourism sectors signed
- EIB Group support in Croatia in 2017 represents 1.22% of the country’s GDP – placing Croatia in third place among EU Member States
- 2017 EIB Group operations in Croatia funded 1 100 businesses and supported more than 15 000 jobs
- Good start to 2018 operations:
- First direct loan granted to a private sector company backed by EUR 16m Investment Plan for Europe guarantee to upgrade tourism infrastructure on the Adriatic Coast
- New EUR 15m loan to HBOR to support biodiversity and climate adaptation investment opportunities in Croatia
- Signature of the Agreement on Advisory Hub to provide advisory services for project development in Croatia
EIB investment in Croatia in 2017
The European Investment Bank Group, consisting of the European Investment Bank (EIB) and its subsidiary, the European Investment Fund (EIF), provided EUR 590m of new loans, guarantees and equity investment in Croatia in 2017. The EIB granted loans of EUR 538m and the EIF made available EUR 50m in the form of guarantees and equity investments in small businesses. The EIB Group’s operations in Croatia account for some 1.22% of Croatia’s GDP, ranking Croatia third among EU Member States in this regard, far above the EU average of 0.46%.
For more details, see section “Highlights of 2017 investments”
Good start to 2018 operations
The EIB is keeping momentum by announcing new financing and advisory agreements with its Croatian counterparts in a wide range of sectors:
- First private sector EFSI loan in Croatia for Adriatic Coast tourism
The EIB signed today a loan of EUR 16m with Valamar Riviera d.d – Croatia’s leading tourism company. This is the first EIB transaction in Croatia with a private sector company that benefits from the support of the EU budget guarantee under the European Fund for Strategic Investments (EFSI), the financing component of the Investment Plan for Europe (IPE). The EIB loan will co-finance the completion of Valamar Girandella Resort with the construction of the first five-star Kinderhotel in Valamar Riviera’s portfolio. With the hotel opening in April this year, the process of repositioning destination Rabac as leading leisure destination for high-end guests will be completed. This loan is complementary to an intermediated loan of EUR 44m granted to Valamar through Croatia’s public development bank HBOR in March 2017.
- EUR 15m for green businesses
In addition to the EFSI operation with Valamar, the EIB is also pleased to announce the signature of a EUR 15m loan to HBOR to support investments targeting biodiversity conservation and climate adaptation, particularly focusing on green infrastructure projects. This operation benefits from the support of the Natural Capital Financing Facility (NCFF), a financial instrument developed jointly by the EIB and the European Commission. The loan will be accompanied by technical assistance to help HBOR identify and foster eligible business and public-sector investment opportunities in this strategically important field to encourage green growth.
Croatia is an exceptionally nature-rich country, being one of the top three countries in Europe for plant diversity. Over 34% of the country has EU-level nature protection status under the Natura 2000 network. Businesses which benefit from these rich natural assets, and in whose interest it is to safeguard this natural asset base, include tourism, sustainable agriculture and forestry. In an urban context, investments in nature-based solutions to address the problems of intense heatwaves and increased flood events – such as permeable paving and green roofing – can help to make cities and towns more resilient to climate shocks and also offer increased amenity value for residents.
- Advice for investment projects
The EIB has also signed an Advisory Agreement with Croatia’s Ministry of Regional Development and European Funds (MRDEUF), enabling the EIB Group, with the support of the Ministry, to provide advisory services to public and private entities. Advisory services will help to identify, prepare and develop investment projects in the framework of the European Investment Advisory Hub (EIAH). The Hub embodies a partnership between the EIB and the European Commission. It represents the second pillar of the Investment Plan for Europe and provides a single point of entry in Croatia to a comprehensive offer of advisory and technical assistance.
EIB Vice-President Dario Scannapieco commented: “Today we have presented the results of the EIB Group in Croatia in 2017, which have reached the highest level since 2013. Disbursements, representing our contribution to the real economy, have reached EUR 729m – an increase of 28% compared to 2016. We have also signed the first direct transaction with a private sector company backed by the EFSI guarantee to support tourism in Croatia – one of the most important economic sectors, generating some 20% of Croatia’s GDP and providing 10% of employment in the country. We have also signed an agreement to further improve the quality of EIB advisory services, establishing the European Advisory Hub as the single point of entry in Croatia for support for project preparation.”
Minister of Regional Development and European Funds Gabrijela Žalac stated: “Croatia has recently established and defined a strategic planning system in the Republic of Croatia, therefore defining the investment planning system and its integration into the strategic planning system is a great challenge but also the great need of our country. With this contract, signed with and completely funded by the EIB, Croatia will get all the necessary advisory assistance from the international team of top experts whose primary objective will be to assist Republic of Croatia in identifying strategic investments and to build up better strategic management system”.
Minister of Finance of Croatia Zdravko Marić mentioned: “We are pleased to see the EIB Group activity in Croatia growing both in annual volume and in the variety of products available, well-illustrated through the three agreements signed today. Besides the continuing support to the backbone of the economy through intermediated loans for SMEs and midcaps, we are glad to have the EIB directly supporting private corporates. By utilizing the increased risk taking capacity through the European Fund for Strategic Investments, the EIB can enable additional private investments in various sectors of the economy. The advisory support of the EIB through the European Investment Advisory Hub to Croatia is highly appreciated as well. Combined together with the use of European Structural Investment Funds, the EIB Group contribution is invaluable for growth and employment in the Croatian economy.”
Commenting on the signature of the loan for the Istrian Riviera Development Project, European Commission Vice-President Jyrki Katainen added: “Applying for financing from the European Investment Bank was a smart move by Valamar. The loan is guaranteed by the European Fund for Strategic Investments so the EIB was able to lend to a smaller-sized business than it traditionally does. As tourism is one of Croatia's key sectors, this project will bring a boost to the economy and sustain local jobs. I can only encourage more businesses in Croatia to contact the EIB and see how EFSI can support their growth plans.”
Marko Čižmek, Management Board Member at Valamar Riviera stated: “The agreement we signed today with the European Investment Bank confirms the remarkable trust that large funders have in Valamar Riviera. It is also a good example of an investment project that has been recognized by top EU institutions as it contributes to a broader development of Croatia’s economy. Valamar continually invests to develop its destinations and improve product quality and work conditions in hospitality. For Valamar, this collaboration is of utmost importance as it represents an expansion of funding resources that will help us carry out large investment projects. We hope to continue this collaboration with EIB in future projects as part of our strategic goals that include a sustainable and socially responsible double-digit growth in results and enterprise value. “Highlights of 2017 investments:
Strategic infrastructure sector
In 2017, the EIB increased its lending by EUR 15m to finance the expansion and upgrading of Dubrovnik Airport, part of the trans-European comprehensive airport network, thereby contributing EUR 32.5m in total to this project. Besides generally improving traffic access to this otherwise geographically detached region of Croatia, the investment is helping to improve traffic flows and alleviate congestion at peak hours in addition to enhancing security and service quality. Finally, airports are generally considered to be job generators, so the project is also fostering economic growth and employment.
Loans for SMEs and mid-caps
The EIB concluded six intermediated loan contracts amounting to EUR 414m with Croatia’s financing institutions in 2017. These institutions are using the EIB funds to finance projects carried out by SMEs and municipalities in the fields of local infrastructure, environmental protection, energy, R&D and innovation, and services, including tourism.
EIB loans have thus improved the access of SMEs to medium and long-term funds on advantageous financial terms. The estimated aggregate number of SME and mid-cap projects financed by EIB loans in Croatia in 2017 is around 1 100, supporting approximately 15 000 jobs.