Boosting flood protection in Croatia

In May 2014 severe floods hit the Balkan countries, including Croatia. Heavy rainfall struck in causing large-scale flooding, landslides, and the collapse of roads.

About 36 000 people in Croatia were affected by the floods. More than 4 000 dwellings were flooded and half of all crops destroyed. 

The tragic aftermath demonstrated the need for countries in the region to continuously develop, upgrade and expand their flood protection systems.  The Republic of Croatia requested a € 40 million loan from the CEB for the implementation of flood prevention measures, targeting specifically the populations living in the high risk areas of the Danube and Adriatic River Basins.  

The proposed project is part of a larger multi-annual investment Programme covering water regulation and protection facilities. 

Within this Programme, the loan should finance the implementation of 25 priority sub-projects in 12 River Basins, selected following a thorough prioritization process during appraisal.

A wide range of civil engineering and hydro-technical works is expected to be undertaken to stop riverbank erosion, reshape and recalibrate riverbeds, consolidate river embankments and increase the stability of watercourses. The Project will also include the rehabilitation and expansion of dykes, canals, and channels.

Overall, the project will improve, restore, complete and develop the existing flood protection system, thus reducing the occurrence of floods and their consequences: loss of human life, damage to infrastructure and property, reduction of economic activity and destruction of agricultural land.  

As a resul of this project, at least 150 000 people will be safer from the floods than they are today.  

The CEB provided extensive support to the Borrower during appraisal, including through technical and environmental missions, which contributed to a better scoping of the Project and of its costs, improved targeting of sub-projects and a better assessment of Project’s risks and related mitigation measures.

Through targeted capacity building measures, the CEB’s financing will be used to improve the operational management of flood risks and enhance the capacity of the Project implementation team. Additionally, river basin studies will be conducted to better define long term risk management plans and assess the socio-economic impact of each system and sub-project. A flood forecasting system is also expected to be developed as part of this project.  

Given the expected high social value of the project an interest rate subsidy from CEB’s Social Dividend Account of up to € 1 million was approved by the Administrative Council. 

In addition to the guidance provided during appraisal, the proposed SDA subsidy should bring additional value to CEB’s intervention, thereby further enhancing CEB’s profile in the area of natural disaster prevention.

The current project complements a € 75 million loan to Croatian Water, aimed at development of water supply and wastewater treatment facilities in Croatia.