ZAGREB, 16 June 2022 - Over the next year, Croatian companies will be among the EU companies hardest hit by the consequences of the war in Ukraine, the European Investment Bank (EIB) says in its latest report.

"Firms in countries closer to Ukraine and Russia, such as Hungary, Poland, Latvia and Lithuania, will feel the pressure. Moreover, firms in Greece, Croatia and Spain will also be more affected than the EU average," says the report, entitled "How bad is the Ukraine war for the European recovery?"

The EIB published a ranking of countries whose companies face the greatest risk from the current situation. The most vulnerable companies are those in Greece, while those in Croatia rank seventh in terms of the risk of losses and bankruptcy among the 27 EU member states.

The EIB noted that EU companies, particularly small ones, were already weakened by the COVID-19 crisis.

"The war will exacerbate firms’ vulnerability through three channels: (1) a reduction in exports, (2) lower profit due to higher energy prices, and (3) difficulty finding funding as banks avoid risk," the report says.

According to the EIB, Croatian companies will be mostly affected by increasing energy prices.

"Firm-level simulations conducted by the European Investment Bank (EIB) suggest the proportion of firms losing money will increase from 8% to 15% in one year, and that the share of firms at risk of default will rise from 10% to 17% over the same period," the bank said.

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ZAGREB, 12 April 2022 - The European Investment Bank (EIB) Group in 2021 secured €760 million to support Croatia's economy, and in 2022 and the years to come emphasis will be put, among other things, on increasing energy independence with investments in renewable energy sources and liquefied natural gas.

In 2021 the EIB invested €113 million and the European Investment Fund (EIF), as the other component of the EIB Group, a record €647 million, with total investments by that EU bank in all key economic sectors in Croatia since 2001 having thus reached €7.2 billion, it was said at a working breakfast organised by that financial institution in Zagreb on Tuesday.

The so far biggest volume of EIF activities in Croatia is based on guarantees issued to state and commercial banks as part of the European Guarantee Fund, worth €650 million.

This has supported the launch of new credit lines for small and medium businesses, with the aim of preserving jobs and helping businesses recover from the consequences of the coronavirus pandemic, it was said.

The EIB invested €63 million in the Croatian Power Company (HEP), thus supporting the company's programme of investment in renewable energy sources, which are considered crucial for building energy independence at an accelerated pace, both in Croatia and the EU.

The EIB also secured an additional €50 million in EIF guarantees for the Croatian Reconstruction and Development Bank (HBOR) to improve financing conditions for medium-capitalised and big Croatian companies.

EIB Group Croatia office head Anton Kovačev said the EIB's emphasis in Croatia this year and in the years to come would be on the European Green Deal and the fight against climate change, notably financing of renewable energy sources, energy efficiency and new energy sources.

In the context of Russia's aggression on Ukraine, Kovačev particularly underlined the importance of energy independence, both for Croatia and the EU.

He said that intensive talks were already underway on new projects for renewable energy sources, saying only that they concerned hydrogen.

Asked about the nuclear power plant in Krško and the possible construction of a new plant block, Kovačev said the EIB could finance such energy on the condition "the highest level of safety" was secured.

Considering the role of the EIB as the EU's climate bank, since early 2022 the bank has not been participating in financing projects based on fossil fuels.

In line with the strategy of increasing energy independence as much as possible, Kovačev said that the EIB was willing to finance the construction of new LNG terminals, both in Croatia and in other EU countries.

He also noted that the group would not neglect other priorities, such as digitalisation and innovation.

Kovačev said the bank wanted to help all enterprises opting for investments in new products and services or the improvement of the existing ones, as a way of helping to boost the competitiveness of the Croatian economy, but that it would also provide support for the state and public sectors. 

ZAGREB, 12 April 2022 - Olga Pascenco, the European Investment Bank's Global Relationship Manager in Croatia, said on Tuesday that this European Union bank would finance and support projects for the construction of storage facilities for energy generated from the renewables.

Addressing a news conference at which the EIB presented its results in Croatia in 2021, Pascenco said that there was great potential for the construction of renewable energy storage facilities.

The EIB is ready to offer financial, technical and advisory support to the private sector in such projects, she said.

The EIB representative spoke about the importance of developing rail and maritime connectivity and about transport connections between islands and the mainland.

Concerning the rail sector, she pushed for improving train services between Zagreb and Rijeka, having in mind the great potential of the seaport of Rijeka.

The EU's lending arm will place emphasis on direct financing of local communities, that is cities, in a set of essential projects such as affordable housing, improvement of energy efficiency and the post-quake reconstruction, she added.

The bank's assistance to Ukraine

The EIB Board of Directors has recently approved a EUR 668 million loan as immediate financial support for Ukraine.

"This initial support package for the war-torn country benefits from the EU guarantee under the External Lending Mandate and complements other initiatives announced by EU institutions," the EIB says on its website.

In addition, the Board agreed that the EIB should pursue further initiatives under the emergency Solidarity Package for Ukraine, worth four billion euros. It includes help to countries in Ukraine's neighbourhood and within the EU that are welcoming refugees from Ukraine or are affected by the war in other ways.

March the 14th, 2022 - Croatian tech companies now have a chance at getting their hands on a slice of the ''cake'' being offered by the European Investment Bank (EIB) following the launch of a Strategic European Security Initiative (SESI) worth up to 6.6 billion euros by the year 2027.

As Poslovni Dnevnik/Ana Blaskovic writes, with the war continuing to rage in Eastern Europe following the Russian invasion, both EU and non-EU European countries are turning to stronger investment in defense and security.

The aforementioned money is earmarked for dual research (for civilian and military use), development and innovation, civilian security infrastructure and state-of-the-art technology projects, from space investment, AI, quantum technology, cyber and bio security including human security, food production and resources like water.

This new initiative will not change the definitions of excluded sectors, which specifically means that the EIB will not continue to finance armaments and defense as it is fundamentally defined. "SESI projects must be dual-purpose and guided by civilian implementation, which means that they're expected to have predominantly civilian use," the bank said.

A chance for the Croatian academic community as well

Gordan Pesic, who is in charge of business development at DOK-ING, has welcomed the EIB's initiative, believing that there are many opportunities within it for Croatian tech companies, but also for the academic community.

"There's certainly room in that programme for Croatian manufacturers, especially for those who close the so-called ''capability gaps'' in terms of security. Among them is DOK-ING, which produces robotic and automated high value-added systems that move people out of imminent danger,'' said Pesic.

Although it doesn't fund arms manufacturers or basic defense, the SESI initiative's propositions leave ample room for maneuver. "Croatian tech companies like the Osijek startup Orqa, Sestan Busch, GDI, and even textile companies developing smart materials could fit into that framework," he said.

DOK ING, at the recently concluded World Defense Show in Saudi Arabia (and about which we recently wrote), attracted a lot of attention from the Saudis with its Chest of Drawers, a unique robotic platform for operating in conditions of chemical, biological, radiological and nuclear hazards.

In addition to the real space sector, according to Pesic, there is also room for research projects taking place in institutions such as the Faculty of Electrical Engineering and Computing and the Faculty of Mechanical Engineering and Naval Architecture, as well as a range of sophisticated computer solutions, such as AI.

The Croatian tech company Orqa, which is now a world-famous startup for highly innovative drone management goggles, has also confirmed its potential interest in this new European funding programme.

"A lot of things we're developing naturally are dual purpose things, from radio communication solutions to remote vision systems, and drone technology in general," explained co-founder and CEO Srdjan Kovacevic, noting that they have used both European and Croatian funding sources effectively in the past.

''We're developing a system for transmitting video signals with low latency, which means that the video signal has a small delay and enables the efficient and precise control of a remote platform (such as a boat, vehicle or drone), it's for hobby drones, but essentially the same technology can be used defensive purposes,'' he explained.

Referring to the current turn of Europe and the EU as a bloc towards strengthening defense and security, Kovacevic says that Europe, unlike the United States, has invested very little in these segments through initiatives of private innovative companies, so in light of current events it is not surprising that there are now attempts being made to try to reduce the gap.

For more on Croatian tech companies, check out our business section.

June 14th, 2021 - The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) on Monday signed the Covid Guarantee Agreement in the amount of €50 million for loans taken by Croatian mid-caps and large corporations to help them recover from effects of the COVID-19 pandemic.

In a joint press release, EIB and HBOR said the EIB contribution valued at €25 billion stems from the European guarantee fund (EGF) set up by EIB in 2020 to accelerate post-COVID recovery, job keeping measures, and to provide much-needed liquidity for European companies.

This is the first EIB operation in Croatia stemming from the EGF, following three EGF operations implemented by the European Investment Fund (EIF). The EIF operations provided guarantees for €350 million in loans. Today’s agreement with HBOR puts the total amount of loans guaranteed by the EGF in Croatia to €513 million,  the press release notes.

Teresa Czerwinska, vice president of the EIB, who is in charge of Croatia, said that the "EIB-HBOR agreement is good news for Croatian economy and local mid-caps and large corporations. It brings further economic relief crucial for faster recovery from the COVID-19 crisis."

Tamara Perko, President of the Management Board of HBOR, said that this Guarantee Agreement "will enable HBOR to approve loans with lower collateral requirements to mid-caps and large companies."

These benefits will be available for direct working capital loans and investment loans to mid-caps under the existing HBOR’s loan programs. It is our pleasure that the EIB has recognized HBOR as its first partner for cooperating under this program in Croatia, which makes it possible for us to offer further benefits to our entrepreneurs irrespective of their size," said Perko.

Croatian companies whose loans were approved six months before the agreement between EIB and HBOR can apply for the guarantees provided the loan agreements were signed after the European Commission approved state support to introduce this financial facility for Croatia.

The EIB reported that the EGF had approved funding amounting to almost half its target for 2021. After clearance under the EU state aid notification process in December 2020, the initiative has now approved €11.7 billion in support of European businesses struggling with the economic fallout of the COVID-19 pandemic. This is almost half the fund’s target for 2021.

The fund mobilizes additional financing, and initiatives approved so far are expected to generate €93.9 billion in funding and investments for the EU economy, the press release notes.

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March the 3rd, 2021 - The Croatian HBOR and the European Investment Bank (EIB) are set to take things up a notch and strengthen their cooperation amid the ongoing pandemic.

As Poslovni Dnevnik/Ana Blaskovic writes, the Croatian Bank for Reconstruction and Development (HBOR) has signed an agreement with the European Investment Bank on financing the development and implementation of investment advisory services worth more than 670 thousand euros in total.

The Croatian HBOR thus received the support of the European Investment Advisory Hub (EIAH), which will enable it to strengthen the capacity of its advisory services and technical assistance to the public sector, primarily local and regional units with an emphasis placed on underdeveloped areas. Up to 0.5 million euros are financed by this EIAH grant, and the remaining part will be financed by the Croatian HBOR.

The Development Bank announced that the project is set to continue to support quality preparation and the development of projects for their more successful implementation while reducing actual costs to investors. The activities envisage a wide range of services to strengthen the capacity of the public sector in structuring sustainable and cost-effective projects, realising investments in the field of environmental protection and management, resource efficiency, the circular economy, smart cities and social infrastructure.

"By providing support to clients from the public sector in the development and structuring of investments and preparation of the necessary documentation, weĺl manage to increase the success of their implementation and the possibility of financing through the use of European Union (EU) funds," said the Croatian HBOR´s Tamara Perko in a statement. She added that the main goal of this team up is to increase the quality and volume of sustainable public investments and contribute to more balanced development, which is one of the strategic goals of HBOR overall.

"After the pandemic, it is now even more important to make our knowledge and experience available to local partners to help them achieve a sustainable form of recovery through advice in preparing quality projects for funding offered by our two institutions and European Union funds available in the new Multiannual Financial Framework," explained EIB Vice President Dario Scannapieco.

The Croatian HBOR's strategy for the period between 2020 and 2024 identifies five strategic goals, including the promotion of balanced and sustainable regional, rural and urban development across the Republic of Croatia.

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February the 28th, 2021 - The European Investment Bank Group enjoyed a record year in Croatia last year despite the economic woes caused by the pandemic, the unstable situation and the restrictive epidemiological measures introduced.

As Marina Klepo/Novac writes, the European Investment Bank Group had a decent 2020, securing 530 million euros in loans, equity and guarantees. The European Investment Bank invested a massive 342.5 million euros, and the European Investment Fund, the second component of the group, invested 187.9 million euros.

''Responding to the economic crisis caused by the ongoing coronavirus pandemic, small and medium-sized Croatian enterprises have been provided with key financial support to preserve jobs and boost the Croatian economy,'' said Dario Scannapieco, the EIB's vice president in charge of business in Croatia,.

"Together with our partners, we've opened up new sources of financing and helped launch the first venture capital funds in Croatia. These activities have modernised Croatian financial markets and increased the ability of domestic financial institutions to stimulate economic recovery and development,'' added Scannapieco, presenting the results of the European Investment Bank Group in Croatia.

He added that the EIB was "looking forward" to further co-operation with the Croatian Government, as well as with the Croatian private and public sectors, in order to seize the multibillion-euro investment opportunities stemming from the EU-wide coronavirus pandemic recovery programme with the simultaneous implementation of initiatives and action programmes in the field of a sustainable and circular economy.

"We must make sure that Croatia benefits from these projects as much as possible, and that it recovers and continues with its sustainable economic and social development," Scannapieco said.

In response to the ongoing pandemic, the group said the EIB set aside approximately 180 million euros for Croatia last year, and that the group is still working with its partners in the country to repurpose and expand existing loans to SMEs and other companies to support the most affected businesses and enterprises.

"In partnership with Croatian financial institutions, new deals are being considered to make new sources of funds available to SMEs and medium-sized companies from key sectors of the Croatian economy," they said from the European Investment Bank Group. Minister of Finance Zdravko Maric recalled that 2020 was a very challenging year for the economy, and that the government, together with European Union and other international partners, reacted with a sense of urgency.

"The European Investment Bank Group has made a significant contribution to responding to the economic consequences of the COVID-19 pandemic in Croatia. By supporting SMEs and other enteprises through domestic financial intermediaries, the EIB has helped to meet current liquidity needs in a time of difficulty that hasn't been experienced in a long time. In addition to emergency support, assistance has been immediately provided for ongoing investment projects to enable their continuation,'' Maric explained.

As increased uncertainty will continue in the coming period, he expressed satisfaction that the European Investment Bank Group is helping to recover as well as meet long-term investment needs. He believes that the EU bank "will play an important role in overcoming future challenges in Croatia."

Within six deals contracted in 2020 to support domestic SMEs, EIB loans reached a massive 342.5 million euros, and more than 70 percent of that amount, or 245.5 million euros, was secured in cooperation with HBOR. The remaining 97 million euros was placed with Croatian commercial banks through domestic companies. Thanks to these activities, since the beginning of operations in Croatia, the total investments of the EIB have reached a huge 7.06 billion euros.

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January the 30th, 2021 - The European Investment Bank is set to intensify its help to Croatian green projects and other similar investments owing to a Memorandum of Cooperation.

As Poslovni Dnevnik/Lucija Spiljak writes, a Memorandum of Cooperation between the European Investment Bank Group (EIB) and the Ministry of Economy and Sustainable Development of the Republic of Croatia (MINGO) was signed in Zagreb and in Luxembourg on Thursday, which opens the door to more active support of the EIB Group in the process of developing Croatian green projects and attracting money from a number of funds and financial initiatives of the European Union, with an emphasis placed on energy, the fight against climate change and economic sustainability.

This is followed by the implementation of projects from the National Energy and Climate Plan of the Republic of Croatia, which will give impetus to the faster development of the Croatian economy from the consequences of the coronavirus pandemic and the devastating earthquakes of 2020, with an emphasis on Croatian green projects.

The Memorandum was signed by EIB Vice President Dario Scannapieco and Minister of the Economy and Sustainable Development, Tomislav Coric, in the presence of Ognian Zlatev, Head of the European Commission Representation in Croatia.

"Our cooperation will help Croatia take advantage of the opportunities offered by various EU programs, funds and initiatives, and attract new investments in projects that are crucial for Croatia," said Scannapieco.

Coric said that Croatia supports the project of reducing and eliminating carbon dioxide in the EU, and that they see this as an opportunity for the development of the Croatian economy and Croatian green projects.

“Our goal of moving to renewable energies by 2030 is ambitious but it's also achievable. In addition to that, there are a lot of new Croatian green projects that will help decarbonise the economy, and we see the EIB as a significant partner in the implementation of these projects,'' said Coric.

Zlatev from the EC believes that this cooperation will help Croatia take full advantage of the European Commission's Green Plan, and successfully implement its ambitious plans in the fields of energy and the fight against climate change, in line with the EU's 2050 goal and achieving carbon neutrality within its economy.

The EIB, as the EU's climate bank, intends to launch a trillion euros by the end of this decade to invest in the fight against climate change across the EU.

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ZAGREB, November 20, 2020 - The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) have signed a new, €142.5 million loan agreement to  support small and medium enterprises (SMEs) in Croatia, the two financial institutions said on Friday.

This is the second tranche of a package worth a total of €400 million. It is part of the EIB's youth employment initiative under which companies that hire young people are granted loans under more favourable terms.

The initiative addresses the issue of youth unemployment as one of the biggest social and economic challenges faced by Croatia and Europe.

The loan is intended for SMEs requiring funds to maintain cash flow and jobs and for further investment to ensure faster recovery from the consequences of the coronavirus pandemic, HBOR Board President Tamara Perko said.

This agreement is yet another confirmation of our good cooperation with the EIB and will provide us with an additional source of affordable lending and make it possible for us to further lower interest rates on loans to businesses employing people of up to 30 years of age, she added.

EIB Vice-President Dario Scannapieco said that the EIB continued to support faster growth and development of the Croatian economy, this time through support for SMEs.

This is the second transaction signed since the outbreak of the coronavirus pandemic in March, providing a total of €240 million for favourable loans to Croatian SMEs and mid-caps, he said.

Last month the EIB and HBOR signed a €100 million credit line for Croatian SMEs and mid-caps affected by the COVID-19 crisis. 

To date the EIB has supported the economic and social development of Croatia by investing €6.71 billion in the most important sectors of the national economy. Another key component of EIB activities in Croatia is support for SMEs and mid-caps through the creation of long-term financing options in cooperation with local financial institutions. To date the EIB has supported Croatian SMEs by unlocking new sources of finances worth close to €3.75 billion.

ZAGREB, March 26, 2020 - The EIB Group invested €569 million in Croatia in 2019, which is 12.2% more than in 2018, the Vice-President of the European Investment Bank, Dario Scannapieco, said in an interview with Hina published on Wednesday.

The European Investment Bank is the lending arm of the European Union. The EIB Group, owned by the member states, has two parts: the European Investment Bank and the European Investment Fund. The EIF fund specialises in finance for small businesses and mid-caps.

Last year's investments of €569 million in Croatia are equivalent to 1.05% of the country's GDP, and Scannapieco said that this reflected the bank's clear intention to remain one of the biggest investors in Croatia and one of the safest sources of accessible long-term loans for sustainable development of the Croatian economy.

Last year, the European Investment Bank supported Croatia's economic and social development with €466 million, a, increase of 5% compared to 2018, while the EIF fund invested €103.3 million, a rise of 60%compared to 2018.

The EIB has been working with Croatia since 1977.

Scannapieco emphasised that from 1977 to the end of 2019, the EIB's total investments came to €6.67 billion.

As for major projects supported by this institution in 2019, Scannapieco pointed out the funding of the second stage of the construction of a new building that will house the university clinical centre in the northern Adriatic city of Rijeka. The bank earmarked €50 million for that project.

He also noted €177 million for the digitisation of the school system in Croatia. The digitised system is facilitating remote learning introduced during the outbreak of the COVID-19 infection in the country.

Scannapieco pointed out the Croatian Ministry of Regional Development and EU Funds as well as the Croatian Bank for Reconstruction and Development (HBOR) as crucial partners with which the EIB had excellent cooperation.

For instance, the cooperation between EIB and HBOR enabled the investment of nearly €300 million in Croatian companies last year.

In 2018, the EIF, in cooperation with the Croatian government, set up the Croatian Venture Capital Investment (CVCI), which helped the EIF to invest €32.6 million in Croatia's innovative companies through the Fil Rouge Capital II.

When it comes to the COVID-19 pandemic, Scannapieco said that the response to this crisis had to be comprehensive and serious.

The EIB will make its resources, know-how and competence available to Europe, he said, recalling that the EIB has already offered a rescue package of €40 billion to cope with the fallout from the pandemic.

More business news can be found in the dedicated section.