The European Investment Bank (EIB), the European Union's long-term lending institution, is providing EUR 10 million (1) in the form of a global loan (2) to the Croatian Bank for Reconstruction and Development (HBOR) for small and medium-sized investments in industry, the service sector, and infrastructure proposed by both public and private promoters in Croatia.
Established in 1992 for the development of the Croatian economy, has objectives closely aligned with State objectives. Being the sole State-owned financial institution responsible for reconstruction and development of the country, HBOR is well positioned to complement the activities of the financial sector by channelling sources of external multilateral finance either directly to beneficiaries, or indirectly through one of its 26 accredited commercial banks.
Further to a first global loan to the HVB Bank Croatia (HVB Croatia) in October 2001, the new EIB global loan, aims at serving further existing private sector and small and medium sized public infrastructure needs for term financing, and contribute to the availability of domestic long-term lending facilities. It underlines the continuing commitment of the EIB to supporting worthwhile investment projects, via reliable local banking partners, in the productive sectors of the Croatian economy to assist with the long-term development of the country.
The EIB loan is provided under the current mandate for Central and Eastern Europe, which was also extended to Croatia following the EU's Council Decision of 07.11.2000.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries. In South-East Europe, the EIB operates under the Mandate for Central and Eastern Europe agreed by the Council of Ministers for 2000 to 2007, which provides for EIB lending of up to EUR 8.7 billion, which complements the EU, as well as EU Member States' own bilateral co-operation policies. To underline its commitment to future post-war reconstruction in the Balkan area, the EIB played an active role in the preparation phase of the reconstruction investment programme, in cooperation with the European Commission and the other multilateral financing institutions. The list of potential infrastructure projects which was published in the Study on Basic Infrastructure Investment in South-Eastern Europe comprises a total of 85 projects totalling EUR 4 billion. Of this total, 35 projects are Quick-Start totalling EUR 1.1 billion, in which the EIB has a lead role in 14, totalling EUR 720 million, i.e. 65% of the total. 50 projects are "Near-Start", totalling some EUR 3 billion, of which EIB has a lead role in 18, amounting to some EUR 1 billion, i.e. 33% of the total Near-Start package. The EIB in Croatia has been mainly supporting the rehabilitation of road infrastructure, and modernisation of the Croatian railway sections of Pan-European corridor Vc, linking Croatia to Hungary and Bosnia Herzegovina, as well as the private sector.
(1) EUR 1= 0.915800 USD
(2) Global loans are available to partner lending institutions, which then on-lend the EIB funds in smaller portions according to the EIB's financing criteria. The funds are targeted primarily towards SMEs in tourism, industry and related services as well as environmental-protection and energy-saving investment schemes, and small to medium -sized infrastructure investments of Local Authorities. The global loans combine the EIB's first rate access to world capital markets, where it raises most of the funds for its lending activity, with the local network and know-how of domestic partner banks.