EIB: About 36 Percent of Companies in Croatia Invested in Improving Energy Efficiency Last Year

The European Investment Bank (EIB) launched its annual EIB investment survey during today’s event, which was organized in collaboration with the Croatian National Bank (HNB). During the survey, more than 12,000 companies across the European Union (of which 481 are in Croatia) and 800 American companies were interviewed, according to the statement.

In their opening speeches, EIB Vice President Teresa Czerwińska, HNB Governor Boris Vujčić, Finance Minister Marko Primorac, and Debora Revoltella, Director of the EIB Economic Department, reflected on the state of the Croatian economy, companies’ perceptions of the challenges they face, and the opportunities provided by Croatia’s accession to the euro area and the Schengen area.

The survey shows that the Croatian economy has recovered from the crisis caused by the coronavirus in less than two years, but vulnerability still exists regarding new shocks. In 2022, nine out of ten companies expected their sales to be at pre-pandemic levels or higher, and they are also recording new investments.

However, companies’ expectations regarding the economic and political climate, business prospects, and availability of financing have deteriorated. On average, Croatian companies are still more optimistic than the overall outlook at the EU level. For nine out of ten companies, energy costs are the main long-term investment constraints in Croatia, along with the availability of qualified labor and an uncertain future.

Croatian Companies Are Taking Measures for Transformation

The survey shows that almost six out of ten companies in Croatia report that weather events negatively affect their business. One in three Croatian companies has already developed or invested in measures to build resilience against physical risks caused by climate change.

The energy crisis has increased concerns about rising energy prices, with nine out of ten companies citing energy costs as a long-term concern regarding investments. About 36 percent of companies in Croatia invested in improving energy efficiency last year, which is close to the EU average of 40 percent. Large companies invest more in energy efficiency when they feel the impact of climate change and energy costs.

Concerns about the availability of financing remain. In Croatia, 10 percent of companies face financial constraints, which is above the EU average (6 percent) and confirms a long-term pattern. Financially constrained companies include those dissatisfied with the amount of funds raised, companies that sought external financing but did not receive it, and those that did not seek external financing because they thought borrowing costs would be too high or that they would be rejected.

– The recovery from the pandemic in Croatia was swift and effective, and I congratulate the Government of the Republic of Croatia on addressing that crisis – said Czerwińska.

It Is Crucial to Utilize Available Funds

– Today, after the Russian aggression against Ukraine, new challenges are emerging that threaten sustainable economic and social growth in Croatia and the European Union. As our semi-annual investment survey shows, the energy crisis has increased concerns among Croatian companies about rising energy prices.

As in the previous crisis, the EIB group is ready to support companies in Croatia to overcome this latest challenge. By 2027, we plan to mobilize up to 115 billion euros in new investments to support the REPowerEU plan for diversifying sources of secure and clean energy, accelerating the energy transition, and improving energy efficiency across the European Union. The EIB group is ready to ensure that Croatia makes the most of this significant investment incentive – she stated.

– In the current economic environment, protecting investments and leveraging synergies between the public and private sectors are key to stimulating economic recovery and increasing resilience. It is crucial to utilize all financial resources available to Croatia, including EU funds from recovery and resilience plans, the InvestEU program, and operational programs for the period from 2021 to 2027.

Combining available EU grants with loans, capital, own resources, or other forms of financial instruments will be crucial for overcoming the transition to a more digital and greener economy in Croatia and throughout the EU. Moreover, to encourage corporate investment, governments should help reduce uncertainty for companies and remove administrative barriers, promote innovation, and develop skills – said Revoltella.

The Governor of the Croatian National Bank, Boris Vujčić, also made a statement.

– It is reasonable to expect that integration into the euro area and the Schengen area would stimulate growth and create new investments, as it is assumed that investment movements reflect existing macroeconomic conditions in the country. In this regard, we cannot forget the complexity of the current environment marked by high inflation and significant uncertainties about future global movements, both economic and geopolitical. Furthermore, the outlook is burdened by increasing exposure to climate risks that affect every segment of our business and life, which needs to be addressed alongside short-term challenges – he concluded.