EBRD President: Last year we invested around 300 million euros in Croatia, and now the priority is the green sector

The President of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, stated that renewable energy sources, primarily from solar and wind, currently represent a priority for EBRD’s activities in Croatia, emphasizing the need to facilitate and accelerate investments in this sector.

Renaud-Basso is on her first visit to Croatia as EBRD President, which she will use to gain better insight into investment potential, with a focus on private sector projects.

The visit comes at a time when the EBRD is marking 30 years of operations in Croatia, during which it has invested more than 4.5 billion euros in the public and private sectors, provided advisory services to over 800 small and medium-sized enterprises, and supported the country’s process of approaching the European Union.

Renaud-Basso reported at today’s media briefing at the EBRD’s Zagreb headquarters that the bank increased its level of activities in Croatia last year, when total investments amounted to nearly 300 million euros, with 82 percent related to the private sector.

She hopes that this level of investment will be maintained this year, highlighting that one of the bank’s key priorities is the green transition, with a primary focus on investments in production capacities from renewable energy sources, primarily solar and wind, as well as easier and faster development of that sector.

She stated that the area of renewable energy is very attractive for attracting foreign investors, and its development is crucial for the country’s long-term competitiveness, but it is necessary to eliminate administrative “bottlenecks” and excessive bureaucracy that slow down such projects.

– There is a great potential that needs to be materialized – Renaud-Basso emphasized, also reminding that the EBRD financed a recently presented study by Croatian experts, which states that the potential capacity of offshore wind farms in Croatia in areas with low impact on the landscape and sea amounts to 25 gigawatts (GW).

Moreover, the EBRD’s contribution to financing current solar and wind farm projects in Croatia amounts to around 170 million euros, and these projects are expected to lead to an increase in production capacities of 250 megawatts (MW).

The green transition, along with renewable sources, also includes issues of increasing energy efficiency, and besides accelerating decarbonization and reducing carbon dioxide emissions, it would also contribute to greater energy security for the country, Renaud-Basso noted.

Meetings with Plenković and Tomašević

The “green agenda” was also discussed at the meeting with Croatian Finance Minister Marko Primorac, and it will also be on the agenda at the meeting with the Prime Minister of Croatia, Andrej Plenković, which is scheduled to take place tomorrow at the Dubrovnik Forum.

Renaud-Basso also met with the Mayor of Zagreb, Tomislav Tomašević, and besides energy efficiency, the meeting addressed projects related to transport infrastructure, waste management, water supply network renewal, and revitalization of industrial zones.

Renaud-Basso’s visit also includes meetings with private companies from the energy and IT sectors, and the EBRD President specifically highlighted the IT sector as one where there is significant potential for investment and further development.

An example of the EBRD’s advisory support for small and medium-sized enterprises is the Blue Ribbon program, which was joined in April by the Croatian IT company Infinum.

EBRD’s initiatives in 2023 in Croatia include promoting women’s participation on boards, the involvement of Ukrainian refugees in the labor market, as well as urban development in Petrinja after the earthquake.

The EBRD noted that they are currently providing technical assistance to the Croatian government in “green” post-earthquake reconstruction of public buildings and improving the management of state-owned real estate.

Last year in Croatia, the largest decline in the share of ‘bad’ loans

The EBRD also published the latest NPL monitor, its report on ‘bad’ loans prepared within the framework of the Vienna Initiative, according to which Croatia is among the countries in Central, Eastern, and Southeastern Europe (CESEE) that recorded the largest decline in the share of NPLs in total loans last year, by 1.4 percentage points, from 5.7 at the end of 2021 to 4.3 percent at the end of 2022, amounting to 253.8 million euros.

Moreover, non-performing loans (NPLs) continued to decline at the regional level, averaging a decrease of 0.4 percentage points last year, reaching a new lowest level since 2016, when the NPL monitor was first published. The share of NPLs in total loans in the region thus stood at 2.3 percent at the end of 2022, amounting to 27.4 billion euros.

The EBRD emphasized that the banking sector in the EU and CESEE region remains stable and resilient. However, vulnerabilities still exist in most countries in the region, where persistent macroeconomic pressures, including high inflation and interest rates, combined with low growth prospects, “contribute to stress in many asset classes,” and it is possible that there could be an increase in NPLs in the coming months.