The social development bank for Europe
CEB’s €200 million loan to foster economic growth and earthquake reconstruction efforts in Croatia
17 May 2022
PARIS – The Council of Europe Development Bank (CEB) and the Croatian Bank for Reconstruction and Development (HBOR) today 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 longstanding 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 channelled 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, 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 to 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 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 programmes, 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 favour of HBOR. It follows a €200 million loan approved in 2019 and a €100 million one from 2017, both of which supported local authorities and MSME investments.
A member of the CEB since 1997, Croatia has so far received more than €1 billion in financing from the Bank to support key investments in health, urban and rural infrastructure, flood prevention measures, and micro-, small- and medium-sized enterprises (MSMEs). Croatia also benefits from and is a partner of the CEB-managed Regional Housing Programme. More details are available here.
Set up in 1956, the CEB (Council of Europe Development Bank) has 42 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook positive and AAA* with Scope Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.