HBOR has begun implementing a new guarantee program

The Croatian Bank for Reconstruction and Development (HBOR) is starting to issue guarantees to large and medium-sized enterprises through a new operational program, aimed at facilitating financing, with an emphasis on green and technological transition, for which the bank has been allocated 79.6 million euros from the NPOO funds.

– As part of the financial instruments implemented from the National Recovery and Resilience Plan (NPOO), HBOR has introduced a new operational program for the implementation of the financial instrument of the guarantee fund for loans to medium market capitalization entities and large business entities – it was announced on Thursday by HBOR.

With the establishment of this program, HBOR is issuing guarantees for large and medium-sized enterprises for the first time, and the beneficiaries of the guarantees can be commercial banks, leasing companies, and HBOR as the creditor. The main goal of the instrument is to facilitate access to financing for medium market capitalization entities and large business entities through the issuance of guarantees, with a special emphasis on green and technological transition, highlighted the Croatian development bank.

The intention is to encourage investment in tangible and intangible assets, all for the purpose of starting, modernizing, and digitizing business operations, implementing new technologies, increasing capacity, developing and introducing new products or services, investing in environmentally friendly production processes and resource efficiency, research and development, and similar.

Up to 30 percent of the loan can also be used for investments in working capital necessary for the implementation of investments and the growth of the business, stated HBOR.

From the NPOO funds, HBOR has been allocated 79.6 million euros for this financial instrument, based on which the total guarantee potential for issuing guarantees will amount to around 400 million euros.

The maximum coverage of the guarantee is up to 80 percent of the principal of the loan for special target groups, which includes investments in special areas of the Republic of Croatia, green and digital transition, research, development, and innovation, and up to 70 percent of the principal of the loan for other investments.

In the framework of issuing guarantees, entrepreneurs are also enabled a subsidy for the guarantee fee of up to 100 percent of the amount, depending on the rules on state aid, as well as a subsidy for interest on the loan for which the guarantee is issued of up to 75 percent of the regular interest rate, depending on the type of investment and the rules on state aid, reported HBOR.

– With this program, HBOR offers the market a quality guarantee product at exceptionally low costs that can be combined with favorable financing. I firmly believe that both the private and public sectors will recognize the importance of this financial instrument. It is common practice that guarantees from cities and municipalities are used in the realization of loans for public companies owned by local and regional self-government units, thereby reducing and limiting the budgetary space. HBOR’s new guarantee will free up space in budgets so that these funds can be used for other needs and projects in the local community – said the CEO of HBOR, Hrvoje Čuvalo, in a statement conveyed in the announcement.

HBOR also reminded that at the beginning of the year, they signed cooperation agreements with fifteen commercial banks on subsidizing interest from NPOO funds.

In this context, a subsidy of up to three percentage points is granted depending on the purpose and type of investment, and it can amount to up to 75 percent of the interest rate for green and digital transition, up to 65 percent of the interest rate for investments in special areas of the Republic of Croatia or in research, development, and innovation, as well as for public sector investments to mitigate the effects of earthquakes, or up to 50 percent of the interest rate for other investments in competitiveness and resilience, stated HBOR.