The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR – Hrvatska banka za obnovu i razvitak) have signed a credit line agreement for EUR 250m. This is the first tranche of an approved lending framework for EUR 800m designed to support the investments of small and medium-sized companies (SMEs) and municipalities.
This EIB credit line will help to improve the employment of young people up to 30 years of age in Croatia in a labour market where they face a permanently high unemployment rate of 30%. The EIB’s Jobs for Youth Initiative gives additional support to final beneficiaries if they can demonstrate that their investment project has contributed to the creation of jobs for young people.
Finally, within the new lending framework, HBOR and EIB have agreed to consider implementing the Bank’s new instrument, the Natural Capital Financing Facility, as a pilot operation for Croatia, and this is to be rolled out in the near future. The EU bank, with the European Commission’s LIFE instrument, designed this facility to offer lending and technical assistance to projects that conserve, restore, manage and enhance ecosystems and that enable businesses and communities to cope with climate change. This is particularly important for the preservation of recognised natural heritage sites and for the development of sustainable tourism in Croatia.
EIB Vice-President Vazil Hudák, who delivered a key note speech at the HBOR International Conference on Export Promotion today, stated: “The successful cooperation of the EU bank and HBOR dates back to the year 2000. To date, the EIB has granted some EUR 2.2bn in loans to HBOR, enabling it to offer more favourable and attractive lending conditions that better fit the needs of Croatian businesses. HBOR supports the investments of innovative companies and, in its role as an export bank, stimulates Croatian exports to other countries worldwide, generating new employment opportunities in the country.”
Miguel Morgado, Director of the EIB’s Adriatic Sea Lending Department, commented: “The EU bank, in cooperation with its well-established partner HBOR, is addressing issues of crucial importance for Croatia, namely the preservation of the high quality environment and natural beauty that show huge potential for tourism, which is already generating some 20% of Croatian GDP. This operation is expected to give young people a more optimistic outlook in terms of job prospects by supporting the SME sector – which is an important growth engine – thereby further strengthening the competitiveness of the Croatian economy.”
Tamara Perko, President of the Management Board of HBOR, stated: “HBOR has always tried to stay ahead of the needs of our entrepreneurs in order to provide them with favourable financing terms and conditions and enable them to improve their competitiveness in both domestic and foreign markets. In these endeavours, we have been extensively endorsed by the EIB, which has been cooperating with HBOR for more than 17 years. The new credit line will not only improve access to finance for small and medium-sized enterprises, but will also generate new job opportunities for young people in Croatia.”
During the HBOR Conference, the EIB Vice-President presented the advantages of special financial instruments that could be successfully applied in Croatia. This includes the SME Initiative, which constitutes a blending of resources from the European Union and the EIB Group (the European Investment Bank and European Investment Fund) to stimulate SME financing by providing partial risk cover for the SME loan portfolios of originating financial institutions. The SME initiative is already performing well in countries such as Bulgaria, Romania and Spain. Another possibility to boost financing is provided by Investment Platforms under the European Fund for Strategic Investments, part of the Investment Plan for Europe. These platforms are co-investment arrangements structured with a view to catalysing investments in a portfolio of projects with a thematic or geographic focus.
EIB lending commitment in Croatia amounts to some EUR 5.3bn since the launch of lending operations in the country. The EU bank currently supports projects covering important sectors of Croatia’s economy, ranging from environmental infrastructure to transport (rail, road, urban, air) and energy infrastructure. Another major part of the EIB’s operations targets the effective financing of manufacturing and services, including support for small and medium-sized enterprises (SMEs) and midcaps in partnership with local financial institutions.