Zagrebačka banka has signed a guarantee agreement with the European Investment Bank, enabling up to €300 million in new loans to be issued to Croatian mid-caps and public entities.
Through further investments by end clients, a total of up to €420 million is expected to be added to the economy over the coming years.
Some 20% of the available financing will be earmarked for investments in alternative sustainable energy sources and in energy efficiency projects for existing buildings.
The European Investment Bank (EIB) and Zagrebačka banka d.d. (ZABA) have signed a guarantee agreement that will enable the Croatian bank to issue up to €300 million in new loans to its clients. The transaction is aimed at Croatian mid-caps and public sector entities and will have a partial focus on sustainability. 20% of the total value of the lending portfolio that ZABA will create is earmarked for investments in alternative sustainable energy sources and in energy efficiency projects for existing commercial and public buildings.
“This is not the EIB’s first operation with Zagrebačka banka, and we are happy to build on their experience in the local market to channel relevant funding to Croatian counterparts,” said EIB Vice-President Teresa Czerwińska. “Previous EIB Group transactions with ZABA are estimated to have made more than half a billion euros in financing available for Croatian small and medium enterprises since the beginning of our partnership, and I’m happy to be able to renew this partnership to benefit mid-caps and public sector entities too.”
“By signing this agreement, Zagrebačka banka has become the first and only Croatian bank in the EIB’s linked risk-sharing programme. This cooperation is a major opportunity to further boost growth in the Croatian economy, enabling us to offer even better lending conditions to clients in the mid-cap and public sector segments. It is also a way for us to actively support sustainable projects, especially those focused on energy efficiency and renewable energy, which is one of our key strategic drivers,”said Ivan Vlaho, chief executive officer of Zagrebačka banka and deputy head of UniCredit Group for Central and Eastern Europe.
The EIB will issue a delegated loan-by-loan partial guarantee to ZABA worth €150 million. This means that with the applicable 50% guarantee rate, the Croatian financial intermediary will establish a portfolio of new lending of up to €300 million. Together with the investments made by the final beneficiaries, the operation is expected to generate up to €420 million for the Croatian economy if the guarantee is fully used.
With respect to sustainable investments, the EIB guarantee will enable ZABA to take more risk on green projects. This is the EIB’s first linked risk-sharing operation for mid-caps in transition in Croatia done without European Commission backing, and the second with a UniCredit Group entity. Decisions on all lending requests under this operation will be taken by Zagrebačka banka.
The European Investment Bank (EIB) finances sound investment contributing towards EU policy goals. Over the last five years, the European Investment Bank has financed over €1.6 billion worth of projects in Croatia.
Zagrebačka banka was formed in 1977 and is today part of UniCredit Group. ZABA was the first Croatian bank to be listed on the Zagreb Stock Exchange in 1995. As the country’s largest bank, its services are used by 80 000 businesses and over 1 million individuals.
Linked Risk Sharing guarantee on new financing for MidCaps and Public Sector Entities in Croatia on their investment efforts and their sustainable transition through the intermediation of Zagrebacka Banka DD (ZABA).
The EIB has agreed to provide credit lines for a total value of EUR 220m to four Croatian banks to fund smaller-scale projects promoted mainly by small and medium-sized enterprises (SMEs), midcaps and municipalities, as well as energy efficiency initiatives.
The European Investment Bank Group (EIB Group) provided €530 million in loans, equity and guarantees to clients in Croatia in 2020. The two parts of the EIB Group, the European Investment Bank (EIB) and the European Investment Fund (EIF), invested €342.5 million and €187.9 million, respectively, making 2020 a record year for the EIF in Croatia.