EIB Boosts Croatia’s Sustainable Growth with Record Financing and Green Investments

EIB Boosts Croatia’s Sustainable Growth with Record Financing and Green Investments

(IN BRIEF) The EIB Group announces a robust year of activity in Croatia for 2023, committing €464 million in financing to support economic and social cohesion, green transition, and digital transformation. This brings the total investment in Croatia over the past five years to €2.4 billion, contributing to smarter, greener growth and bolstering resilience in the face of economic challenges. Key initiatives include support for SMEs, mid-caps, and public sector entities, focusing on energy efficiency, clean energy, sustainable transport, and environmental protection. The EIB’s strategic partnerships with Croatian institutions like HBOR and ZABA, alongside advisory services and municipal framework loans, underscore its commitment to fostering sustainable urban and regional development. However, challenges persist, with Croatian firms facing barriers to investment, particularly in access to finance and skilled staff. The EIB remains dedicated to supporting Croatia’s transition to a competitive, inclusive, and sustainable economy despite these hurdles.

(PRESS RELEASE) LUXEMBOURG, 14-Feb-2024 — /EuropaWire/ — The EIB Group, comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), has announced a strong year for its activity in Croatia in 2023. With annual financing of €464 million, investment by the EIB Group in the country for the past five years now totals €2.4 billion. The funds will promote a smarter, greener growth model, as well as economic resilience and better quality of life.

All of the new financing committed by the EIB Group in Croatia in 2023 went to projects supporting economic and social cohesion, which will facilitate faster convergence within the European Union and underpin the country’s transition to a greener and more sustainable economy.

In 2023, EIB Group financing accounted for 0.61% of Croatia’s gross domestic product, mobilising investments worth nearly €1.15 billion. These investments benefited 1 052 small and medium firms (SMEs) and mid-caps, sustaining more than 48 500 jobs — a testament to the substantial role played by the EIB in fostering economic growth and development.

Looking ahead, the EIB’s Board of Directors approved a record €2.17 billion in 2023 for projects spanning all sectors of the Croatian economy: from sustainable urban development to railway systems and the private sector, with signatures expected over the coming years.

“We are proud to have achieved a strong year of financing in Croatia,” said EIB Vice-President Teresa Czerwińska. “Through advisory support and investments in sustainable infrastructure and the green and digital transition of the Croatian small and medium enterprises, mid-caps and public sector entities, we remain committed to helping the country build a resilient, competitive and inclusive economy.”

One key focus for the EIB has been the green and digital transformation and competitiveness of Croatian businesses. The EU bank has increased cooperation with the Croatian Bank for Reconstruction and Development (HBOR) by making half a billion euros available to help SMEs, mid-caps and public sector entities grow. To this aim, the parties signed the first tranche for €200 million last year. Around 20% of the resources will be invested in energy efficiency, clean energy production, sustainable transport and environmental protection. The agreement will also help HBOR to absorb EU grants and structural funds, and is expected to mobilise up to €1 billion of investments in the Croatian economy.

Some €300 million in new loans will be available to mid-caps and public sector entities in Croatia following a guarantee agreement of €150 million signed between the EIB and Zagrebačka banka (ZABA) in 2023. About a fifth of the total value of the lending portfolio that ZABA will create will also be for green investments in sustainable energy sources and energy efficiency.

As part of guarantee agreements between the EIF and UniCredit Group across seven EU countries, around €64 million were signed for operations in Croatia to support investments by SMEs in the twin green and digital transitions, and to boost cultural, educational or social sectors.

The EIB Municipal Survey 2022-2023 showed that a lack of funding continues to be a significant deterrent for municipalities when it comes to planning investment, alongside lengthy and complicated regulatory processes and trouble finding experts with environmental and climate skills.

Delivering on its commitment to support smart and sustainable urban and regional development, the EIB approved its first flagship municipal framework loan for the city of Split for a total of €150 million. The first tranche of €49 million, signed in 2023, will support investments in the city’s green and digital transition that will improve public services and residents’ quality of life.

In 2023, the EIB Advisory services continued to provide valuable advisory and capacity-building support to Croatian partners, fostering the green transition across different sectors. Backed by the InvestEU Advisory Hub, the EIB signed two advisory agreements to support sustainable and efficient transport systems in the country with the motorway operator Hrvatske Autoceste, for the implementation of a new electronic toll collection system and for greening the motorway network. The city of Zagreb will benefit from the EIB’s European Local Energy Assistance (ELENA) facility and receive technical assistance to renovate and improve the energy efficiency of 50 public buildings in the capital.

According to the annual EIB Investment Survey for 2023, firms in Croatia retained a positive outlook on their investment intentions(albeit diminished from the previous year). The survey underscores the growing impact of climate change on Croatian firms, with 63% reporting adverse effects from weather events, compared to 59% in 2022. Still, only a third (32%) of companies have already taken action to address the effects of weather events and carbon emissions reduction, below the EU average of 56% Croatian firms are facing significant long-term barriers to investment, the survey showed. The availability of skilled staff, uncertainty about the future and energy costs are among the most frequently mentioned challenges. Another hurdle is access to finance, with the proportion of financially constrained firms in Croatia (11.4%) almost double the EU average (6.1%).

Background information

EIB

The European Investment Bank (ElB) finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

Media Contact:

Tsvetelia Tsolova
t.tsolova@ext.eib.org
+352 4379 – 70065

Press Office

press@eib.org
+352 43791

SOURCE: European Investment Bank