HBOR Begins Implementation of the Urban Development Fund

The Croatian Bank for Reconstruction and Development (HBOR), in partnership with the Ministry of Regional Development and EU Funds, has developed a new financial instrument – the Urban Development Fund, whose operational implementation officially began at the end of last week.

In a statement released on Monday, HBOR states that the Urban Development Fund represents an innovative solution for financing public infrastructure projects enriched with commercial content, thereby enabling revenue generation from service fees.

This fund supports projects that promote environmental protection, energy efficiency, and the use of renewable energy sources, as well as the construction of multifunctional facilities for sports, tourism, culture, and business activities.

A key feature of the Urban Development Fund is its structure, which includes a combination of loans and grants. A capital rebate, or principal write-off, which can amount to up to 50 percent of the total loan amount, is achieved upon meeting predefined criteria for sustainability, aesthetics, and inclusivity.

Loans will be granted without fees for processing the loan application, for reserving funds, or for early repayment (write-off) of the loan resulting from the realization of the capital rebate.

The repayment period is up to 15 years, including a grace period of up to 12 months.

The minimum loan amount is 100,000 euros, while the maximum amount can reach 10 million euros.

The loan represents a combination of funds from the European Regional Development Fund (ERDF) with an interest rate of 0 percent per annum, fixed, and funds from HBOR with an interest rate that is determined quarterly and currently, until June 30, stands at 3.52 percent per annum, fixed.

This initiative is in line with HBOR’s strategy aimed at supporting regional development and sustainable projects, particularly in the context of financing through EU funds and the National Recovery and Resilience Plan (NPOO), concludes the HBOR statement.