CEB’s €200 million loan to foster economic growth and earthquake reconstruction efforts in Croatia

ByCouncil of Europe Development Bank

CEB’s €200 million loan to foster economic growth and earthquake reconstruction efforts in Croatia

The Council of Europe Development Bank (CEB) and the Croatian Bank for Reconstruction and Development (HBOR) signed a €200 million loan to foster economic growth and support earthquake recovery and reconstruction efforts in Croatia.

In 2020 Croatia’s economy contracted sharply due to the COVID-19 pandemic. Furthermore, two powerful earthquakes hit the country in March and December 2020, causing large-scale damages and hampering people’s access to public services, including healthcare and education.

“We are very pleased to continue our long-standing cooperation with HBOR and to support sustainable recovery in Croatia following a very challenging period marked by the COVID-19 pandemic and two destructive earthquakes,” said CEB Governor Carlo Monticelli. “Our latest loan will enable investments in vital social infrastructure across the country and promote regional development.”

The CEB loan will be channeled through HBOR directly to eligible end-borrowers to partially finance the development and upgrading of local and regional infrastructure, such as water supply, wastewater disposal, and treatment networks, local roads, educational, and cultural, and other municipal facilities.

The loan will allow HBOR to support micro-, small- and medium-sized enterprises (MSMEs), create new jobs and preserve the existing ones, and finance the reconstruction and retrofitting of the infrastructure and buildings damaged by the earthquakes.

Due to its flexibility in terms of allocation, regional distribution, and the possibility to blend with other financing sources, the loan will enable HBOR to promote competitiveness and enhance access to financing for small businesses and local authorities.

“Thanks to the funds of CEB, which has been our reliable partner for more than 20 years, HBOR has supported 1,500 projects of small and medium-sized enterprises and almost 200 infrastructure projects of the public sector,” said Tamara Perko, President of the HBOR Management Board. “We will use these loan funds for financing under our current loan programs, but also for projects that will be financed under the National Recovery and Resilience Plan (NRRP).”

The eligible end-borrowers include start-ups, MSMEs, public and private entities playing a role in the economic and infrastructure development in Croatia, local government units and institutions, and public utility companies. The loan will be implemented throughout the country thus benefitting a large number of final beneficiaries.

This is the ninth CEB loan in favor of HBOR. It follows a €200 million loan approved in 2019 and a €100 million one in 2017, both of which supported local authorities and MSME investments.