Croatia: EIB supports four banks on small projects with long-lasting impact
5 December 2017
The European Investment Bank (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 four banks taking part in the financing are: Hrvatska banka za obnovu i razvitak (HBOR – EUR 100m), which is the state-owned national bank for reconstruction and development, and three national commercial banks: Privredna banka Zagreb (PBZ EU – EUR 60m), Zagrebacka Banka (ZABA – EUR 40m) and Hrvatska Postanska Banka (HPB – EUR 20m).
“The partnership between the European Investment Bank and HBOR and three prominent Croatian banks will make additional long-term finance available to Croatian companies, unlock further capital for the implementation of their projects and provide significant support for youth employment”, said EIB Vice-President Dario Scannapieco. “In addition, we are using Private Finance for Energy Efficiency – an innovative financial instrument designed to foster priority investments contributing to energy efficiency – for the first time in Croatia.”
EU Commissioner Miguel Arias Cañete stated: "By combining together cash collateral, a technical assistance facility and EIB loans, the "Private Finance for Energy Efficiency " (PF4EE) financial instrument, already deployed under the LIFE programme, has a high potential to unlock financing to energy efficiency investment."
The EIB funding will target the following projects and activities:
The EUR 100m loan to HBOR will co-finance midcaps’ projects in a large number of sectors, such as manufacturing, services (including tourism), infrastructure, the knowledge economy, energy, and environmental protection. Importantly, the funding aims to increase the employment of young people up to 30 years of age in Croatia, a country where the labour market is experiencing a permanently high unemployment rate of 30% among the younger generation. The EIB’s Jobs for Youth Initiative is able to give additional support to final beneficiaries if they can demonstrate that their investment project has contributed to the creation of jobs for young people.
The EIB has a well-developed partnership with HBOR and has provided this institution with credit lines amounting to approximately EUR 2.5bn (including the current transaction) since the launch of its operation in Croatia in 2001.
The EUR 60m loan to Privredna Banka Zagreb (PBZ), the second largest commercial bank in Croatia with an extensive client franchise, will be targeted at SMEs and midcaps, making affordable financing available to them.
The EUR 40m loan to Zagrebacka Banka (ZABA), the largest commercial bank in Croatia, is specifically targeted at energy efficiency measures. The loan is supported by the Private Finance for Energy Efficiency (PF4EE) financial instrument, which provides European Commission portfolio-based credit risk protection, together with long-term financing from the EIB and expert support services for financial intermediaries financed by the LIFE Programme. The PF4EE is a joint instrument of the EIB Group and the European Commission aimed at targeting the financing of energy efficiency investments in the EU and projects related to this goal. The PF4EE transaction with Zaba targets EE investments by small businesses and corporates.
Finally, the EUR 20m loan to Hrvatska Postanska Banka (HPB) is the first EIB operation with this financial intermediary, thus increasing the number of financial institutions on-lending EIB funds in Croatia.
The EIB has signed a EUR 25 million, 20-year tenor, loan agreement with the Põhja-Eesti Regionaalhaigla or North Estonian Medical Centre (NEMC). The financing will support the new construction of a psychiatric clinic, as well as a new building to consolidate the pathology, oncology and haematology departments of the hospital, responding to an urgent need for better inpatient and outpatient facilities. Next to the EIB loan the project is financed by the Nordic Investment Bank, European Structural Funds, and is expected to benefit from an upcoming loan from the Council of Europe Development Bank (CEB).
The EIB signed a EUR 31 million loan with Elektro Maribor, electricity distributor from Slovenia`s second largest city of Maribor; the loan will go towards maintenance or improvements in the reliability and in quality standards of electricity supply. The EIB loan supports Elektro Maribor`s EUR 81,2 million investment in reconstruction and development of its electricity distribution network in order to minimise power blackouts and blackout-related damage to property and environment.
The EIB is assisting the Madrid Region in its efforts to tackle the COVID-19 health emergency. The EU bank is providing a EUR 600 million loan on favourable terms to enable the authorities to adapt Madrid’s health facilities and cope with the additional health costs caused by the pandemic.