HBOR and EIB Sign Guarantee Agreement Worth 50 Million Euros

The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) have signed a Guarantee Agreement worth 50 million euros for loans granted to medium-sized and large enterprises to finance recovery from the effects of the COVID-19 pandemic. The EIB guarantee stems from the European Guarantee Fund (EGF) established by the EIB Group in 2020 to accelerate the recovery of the European economy after the COVID-19 pandemic to preserve jobs and ensure the much-needed liquidity of European companies.

This is the first transaction of the EIB in Croatia under the European Guarantee Fund and the fourth EIB Group transaction following three EGF transactions conducted by the European Investment Fund (EIF). Under the EIF transactions, guarantees for 350 million euros in loans have been secured, and with the agreement signed today with HBOR, the total amount of loans guaranteed by the EGF in Croatia rises to 513 million euros.

– The agreement between the EIB and HBOR is good news for the Croatian economy and local medium-sized and large enterprises. It represents further economic assistance crucial for a faster recovery from the crisis caused by the COVID-19 pandemic, preserving jobs and income, and the overall competitiveness of Croatian companies. With our transaction, EGF support is expanding from small and medium-sized enterprises to medium-sized and large enterprises, making recovery support available to all who need it. I am extremely proud that the EIB and HBOR continue to provide effective, timely, and practical solutions to the significant economic and social challenges faced by Croatia and the European Union, including recovery from the COVID-19 crisis, the main challenge of today – stated Teresa Czerwinska, EIB Vice President responsible for Croatia.

The guarantee can secure loans granted to Croatian medium-sized and large enterprises up to 6 months before the signing of the agreement between the EIB and HBOR, provided that such loans are signed after the date of approval of the European Commission’s Decision on state aid for the introduction of this financial instrument for Croatia.

– This agreement will allow us to finance medium-sized and large enterprises with lower requirements for collateral instruments, which we have already enabled for small and medium-sized and small medium-sized enterprises with the previously signed agreement with the EIF. This benefit can be used when approving direct loans for working capital, as well as investments of medium-sized enterprises under existing HBOR programs. We are very pleased that the EIB has recognized HBOR as the first partner in Croatia for cooperation under this program and that we have thus enabled additional benefits for all our entrepreneurs, regardless of their size – added Tamara Perko, CEO of HBOR.

EGF Achieved Half of the Set Target for 2021

The EGF has approved financial resources amounting to almost half of its set target for 2021. Following approval under the EU state aid application process in December 2020, the initiative has approved 11.7 billion euros in aid to European companies struggling with the economic consequences of the COVID-19 pandemic. This is almost half of the fund’s target for 2021.

The fund mobilizes additional financial resources, and it is expected that the initiatives approved so far will generate 93.9 billion euros in financial resources and investments for the EU economy. The demand for EGF financial resources is high, and it is expected that further approvals and signings will soon exceed 50% of the target set by the beginning of summer.

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