Tuesday, 29 June 2021

European Reconstruction and Development Bank (EBRD) Nearly Doubles Economic Growth Forecast For Croatia in 2021

ZAGREB, 29 June, 2021 - Croatia's economy will grow by 6% in 2021, the European Reconstruction and Development Bank (EBRD) says in its forecast on Tuesday, almost doubling its previous estimate in anticipation of vaccination against COVID-19 and tourism recovery.

In October 2020 the EBRD forecast that Croatia's economy would grow by 3.5% in 2021.

In 2020, marked by the coronavirus pandemic, Croatia's GDP dropped by 8.4%, slightly less than the EBRD had forecast last autumn.

The latest forecast shows that by the end of 2021 the economy will contract by 2.9% compared to the pre-pandemic year 2019.

In 2022 the growth of economic activity is expected to slow down to 4.5%.

Tourism and European fund

The COVID-19 pandemic inflicted significant damage on the Croatian economy in 2020, and a key channel for disruption was tourism, which normally accounts for around 20 per cent of GDP, says the EBRD.

Nevertheless, the economy inched closer to prepandemic levels in the first quarter of 2021, with GDP growth at -0.7 per cent year-on-year (5.8 per cent quarter-on-quarter) on the back of robust exports of goods, investments in construction and a partial recovery in private consumption.

The strong momentum of the economy will likely be maintained in the remaining quarters of 2021 as the vaccination campaign progresses and tourism picks up, the EBRD says.

If tourism invoices reach 70 per cent of 2019 levels, as expected, GDP could expand by 6 per cent in 2021, it says.

In 2022, incoming EU funds and post-earthquake reconstruction will boost investment, and together with expanding private consumption and recovering tourism, will continue the high-growth momentum at around 4.5 per cent.

The main risk to the outlook remains the pandemic evolution, as new variants and insufficient vaccination could lead to other infection waves, the EBRD notes.

The EBRD also significantly increased its growth estimate for 2021 for the region of Europe and the Baltics, which includes Croatia, by 1.3 percentage points to 4.8%. It expects a similar growth rate in 2022.

In the entire region where the EBRD operates, economic activity is expected to grow in 2021 by 4.2%, 0.6 percentage points more than forecast last autumn.

In 2022, economic activity in the EBRD region is expected to slow down to 3.9%.

For more about business in Croatia, follow TCN's dedicated page.

Monday, 16 November 2020

Zadar to Get Better Drainage System Through EBRD Loan and EU Funds

ZAGREB, November 16, 2020 - The European Bank for Reconstruction and Development (EBRD) has approved a €4.5 million loan for the completion of a capital drainage system project in Zadar, in addition to €42 million approved from the EU Cohesion Fund for the Zadar utility company, EBRD said on Monday.

The EBRD loan will be used for the reconstruction and expansion of Zadar's drainage system.

The project involves the construction and reconstruction of more than 100 kilometres of pipelines and collectors, 17 pump stations and increasing the current rate of 75% of households connected to drainage to 95%. The Odvodnja utility company manages wastewater collection and treatment for about 80,000 residents in the Zadar area.

This capital investment will significantly impact the quality of life for local residents and will enable the sustainable development of Zadar and neighbouring municipalities, which prior to the coronavirus pandemic recorded more than 1.4 million tourist arrivals a year, head of EBRD operations in Croatia, Victoria Zinchuk, said.

Mayor Branko Dukic said that Zadar was "faced with an extensive construction project, including the reconstruction of the water supply system, which will lead to significant savings of water as well as enabling the construction of all streets where the new pipelines will be laid... The project will resolve the problem of rainwater in the Bokanjac area and enable connecting 95% of Zadar's households to the public drainage system," said Dukic.

Odvodnja director Grgo Peronja said that the new system will help protect the sea and coastland from pollution.

EBRD recalled that the first projects in Croatia financed by EBRD were agreed in 1994 and since then EBRD has invested more than €3.9 billion in 219 various projects, particularly in infrastructure, entrepreneurship, financial institutions and energy.

Wednesday, 4 November 2020

EBRD: Kopilica Area of Split to be Modeled on Barcelona

November 4, 2020 - The Kopilica area of Split will be modeled on the Spanish city of Barcelona thanks to a 600,000 euro project financed by the EBRD.

The European Bank for Reconstruction and Development (EBRD) is financing the strategic plan of Austrian company iC Consulenten with 600,000 euro, according to which the Kopilica area of Split would undergo a thorough revitalization to develop cultural, congress and hotel facilities and become like parts of Barcelona, the EBRD said on Tuesday.

The statement reads that the urban revitalization plan will radically transform Split by redeveloping a key port area and developing the city's Kopilica district. Split itself, it is said, will be able to reach its full potential, inspired by the success of similar interventions in cities such as Barcelona, ​​Copenhagen, and London, where the neglected railway and port locations have been transformed into lively new neighborhoods tempting to work and live.

The strategic plan, developed by Austrian civil engineers from iC Consulenten and financed by the EBRD with 600,000 euro, focuses on the location of the main railway station in the port area and the Kopilica district on the northern coast of the Split peninsula. The goal of the plan is to reduce congestion in the city center and use the best city locations such as the main station, with the possible expansion of the city center.

The new arrangement of the port area and Kopilica would create a potential gross developed area of ​​about 1.2 million square meters for approximately 15,000 inhabitants and 10,000 to 15,000 jobs.

The revitalization of the main station and the new road tunnel in the port would enable the development of cultural, congress, and hotel facilities.

As for Kopilica itself, the expansion of the city center is expected to include business premises, a university, large residential areas, and a "park and use public transport" system, which will be of great importance for the entire city area. EBRD estimates that meeting these goals will require a substantial new transport infrastructure.

A new light railway to the airport and a motorway bridge across the bay from Solin to Kopilica will be necessary preconditions for this development project. The EBRD supports this plan as part of its broader work in the field of urban revitalization as a holistic approach to overcoming the challenges faced by many cities in the countries in which they are active.

The EBRD is currently participating in projects in Pula, Šibenik, and Zagreb.

"Urban revitalization provides opportunities to rebalance the economy, attract foreign investment and use EU funds efficiently, and as the state has a key role to play in stimulating that investment, the EBRD is working closely with governments and state-owned enterprises at all levels to support the implementation of ambitious plans to transform Croatia's larger cities," the statement said.

The EBRD is a multilateral bank that promotes private sector development and entrepreneurial initiative in 38 countries on three continents. It is owned by 69 countries and the EU and the EIB.

Source: HINA, The Financial

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Monday, 24 February 2020

Plenković Calls for Investments in Western Balkans

ZAGREB, February 24, 2020 - Croatian Prime Minister Andrej Plenković, who on Monday attended the EBRD's Western Balkans Investment Summit 2020 in London, called on potential investors to invest in that part of Europe.

Croatia will do all it can to help its southeast neighbours and the investment community needs to utilise this opportunity to the benefit of those countries and for the benefit of the entire European Union, said Plenković at the event organised by the European Bank for Reconstruction and Development (EBRD).

The summit meeting was opened by EBRD President Suma Chakrabarti and Prime Minister of Croatia, Andrej Plenkoviž, in his current position as holder of the European Union presidency.

This is the fourth EBRD summit of its kind; the inaugural Western Balkans Summit took place at the EBRD in February 2014 and, for the first time, brought together all the region’s six prime minister: Duško Marković of Montenegro, Edi Rama of Albania, Oliver Spasovski of North Macedonia, Zoran Tegeltija of Bosnia and Herzegovina, Albin Kurti of Kosovo and Ana Brnabić of Serbia.

We are a country that is the most familiar with that region and which is offering support to those countries so that their path to the European Union can be accelerated. That is one of the key priorities, Plenković said.

He added that as the presiding country of the EU, Croatia had already achieved success in putting the topic of EU enlargement high on the agenda. That has motivated some other member states to organise high-level meetings ahead of the Zagreb summit in May on the topic of enlargement to the Western Balkans, he added.

As the leading investor in the region we are looking forward to this fourth edition of EBRD's Western Balkan investment summit which is a priority for the EBRD. Our aim is to unlock the potential of that region supporting a greater economic growth and its regional and European integration, Charkrbarti said. He announced that six new projects would be signed for the Western Balkans.

The EBRD has invested to date 13 billion in the Western Balkan countries.

More news about Croatia and Western Balkans can be found in the Politics section.

Wednesday, 19 February 2020

EBRD and USAID Assist in Connecting Croatia and Bosnia Gas Pipelines

ZAGREB, February 19, 2020 - Representatives of the BH-gas company, the European Bank for Reconstruction and Development (EBRD) and the US Agency for International Development (USAID) on Wednesday signed a grant agreement in Sarajevo for a project to connect Bosnia and Herzegovina's and Croatia's gas networks.

BH-gas, which is the largest gas provider and distributor in Bosnia and Herzegovina, said in a press release that the agreement would activate funds earmarked for environmental impact and feasibility studies for the South Gas Interconnection project.

The project involved building a gas pipeline from Zagvozd in southern Croatia toward Posušje and on to Travnik in Bosnia and Herzegovina, with a special pipeline branching off to Mostar.

The project would secure an additional gas supply route for Bosnia and Herzegovina which has been entirely dependent on Russian gas for decades via a trunk pipeline through Serbia.

The project was launched because the Republika Srpska entity authorities refuse to agree to connecting the two countries' gas networks along the shortest and cheapest route, running from Slavonski Brod to Bosanski Brod.

Northern areas of Bosnia and Herzegovina located in the Serb entity still do not have access to gas as an energy product and the authorities in Banja Luka want to build a new pipeline that would pass exclusively across the entity's territory and be connected to Serbia's gas network.

USAID is providing $500,000 for the South Gas Interconnection project while the remaining costs will be covered by the EU.

BH-gas expects the project documentation to be completed by the end of the year.

More energy news can be found in the Business section.

Saturday, 31 August 2019

Croatia Continuing Successful Cooperation with EBRD

ZAGREB, August 31, 2019 - Prime Minister Andrej Plenković on Friday received representatives of the European Bank for Reconstruction and Development (EBRD) headed by the bank's vice president Pierre Heilbronn, the government said in a press release, underscoring that cooperation between EBRD and Croatia and the implementation of projects were continuing.

"Prime Minister Plenković expressed his satisfaction with the cooperation with the EBRD thus far which is reflected in 3.8 billion euro in funding that the EBRD has approved until now to finance 210 projects in Croatia in the field of transport infrastructure, energy, shipbuilding, tourism, local infrastructure and environment protection, and small and medium-sized enterprises," the government said in a press release.

During the meeting, there was talk of positive economic trends in Croatia with regard to continuing GDP growth, the stability of public finances, generating a budget surplus as well as having the country's credit rating reinstated to investment level (according to Standard & Poor's and Fitch).

Plenković and Heilbronn discussed the EU's new multi-annual financial framework 2021-2027 and Croatia's chairmanship of the Council of the EU in the first half of 2020. The EBRD has been recognised as an important partner in achieving common priorities directed at job creation, growth and strengthening competitiveness, employment, with special focus on young people, connectivity, security and EU enlargement.

In that context, Heilbronn announced a summit of Southeast European countries that EBRD is organising in February 2020 in London, the press release said.

Prior to meeting with the prime minister, Heilbronn met separately with Finance Minister Zdravko Marić and Regional Development and EU Funds Minister Marko Pavić.

More news about Croatia and the EBRD can be found in the Business section.

Thursday, 31 May 2018

EBRD Leadership Discusses Investments with Prime Minister

ZAGREB, May 31, 2018 - Prime Minister Andrej Plenković on Wednesday received representatives of the European Bank for Reconstruction and Development (EBRD) and discussed investments in the private sector, tourism and road infrastructure, the government said in a press release.

Wednesday, 9 May 2018

EBRD Expects GDP to Grow 2.7%

ZAGREB, May 9, 2018 - The European Bank for Reconstruction and Development (EBRD) expects Croatia's economy to go up 2.7% in 2018 and 2.5% in 2019, thus joining a number of Croatian and foreign institutions and analysts projecting a slower growth rate compared to last year.

Tuesday, 8 May 2018

EBRD to Increase Investments in Croatia

ZAGREB, May 8, 2018 - The European Bank for Reconstruction and Development (EBRD) last year invested 124 million euro in Croatia and according to the EBRD director for Croatia, Slovenia, Slovakia and Hungaria, Vedrana Jelušić Kašić, the bank is expected to significantly increase the investment volume this year.

Thursday, 31 March 2016

EBRD and Croatian Motorways Sign Agreement on a 250 Million Euro Loan

New loan for heavily indebted Croatian Motorways public company.

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