Croatia: First EIB operation backed by EFSI signed - EUR 50m guarantee to HBOR for MidCaps and other priorities

The European Investment Bank (EIB) is supporting HBOR (Hrvatska Banka za Obnovu i Razvitak) with a EUR 50 million guarantee aiming to finance MidCap companies and other priority projects in Croatia. This is the EIB’s first operation in Croatia guaranteed by the European Fund for Strategic Investments (EFSI), the guarantee set up as part of the Investment Plan for Europe (IPE) – the so-called “Juncker Plan”.

“I am very proud to announce the first operation of the EIB in Croatia under the EFSI umbrella: in one year and a half the EIB has reached almost 50 per cent of the final target of the Investment Plan for Europe. Thanks to the excellent collaboration with HBOR, Croatian MidCaps will benefit from the positive domino effect of the financial guarantee,” said Dario Scannapieco, the EIB Vice-President responsible for Croatia.

Commission Vice-President Jyrki Katainen said: "Today's signature in Croatia of an EIB guarantee financed under the Investment Plan signals that we are improving the geographical coverage of the European Fund for Strategic Investments (EFSI). Improving the geographical reach of EFSI is a key element in our proposal for its extension. Having now reached the halfway mark in our target for mobilising an additional €315 billion of investments in Europe, we are firmly on track".

“I am particularly pleased that HBOR is the first development bank in the European Union to start cooperation with the EIB under this model. It gives me even more pleasure that the EIB’s assumption of a part of the risk enables HBOR to increase its direct lending and risk-assuming, which is eventually the most significant benefit for our businessmen,” said Dušan Tomašević, the HBOR President of Managing Board.

In detail, the operation will be structured as a risk-sharing instrument to cover up to 50% of credit risk associated with a portfolio of existing corporate loans outstanding on HBOR's balance sheet. As a condition and with the resources made available by the guarantee, HBOR will grant new loans to MidCaps and other eligible promoters up to EUR 100 million. The proposed guarantee instrument is designed to facilitate the financial intermediary to provide new loans for MidCaps.

The Investment Plan for Europe focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment projects. The Investment Plan is already showing results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise EUR 154 billion in total investments across 27 Member States and to support close to 377,000 small and mid-sized companies. On 14 September 2016, the Commission proposed extending the EFSI by increasing its firepower and duration as well as reinforcing its strengths.