Tuesday, 17 May 2022

New Dubrovnik Public Lighting to Save City 2 Million Kuna Annually

May the 17th, 2022 - The brand new Dubrovnik public lighting system is set to save Croatia's southernmost city and tourist Mecca a significant two million kuna per year.

As the Republic of Croatia turns more and more towards the European Union's wider goal of becoming more green and employing much more environmentally friendly tactics across the board, public lighting systems and converting them from energy inefficiency to energy efficiency with the use of new lamps is one of the priorities across the country.

As Morski writes, the City of Dubrovnik has initiated a public procurement procedure for the project of the reconstruction and modernisation of the Dubrovnik public lighting system. Bids are being collected until June the 10th, and 14 million kuna has already been secured for this project which is set to save the city a decent amount of money each year.

The project of the complete reconstruction and modernisation of the Dubrovnik public lighting system includes 3739 obsolete lighting fixtures in the wider city area. The existing system consists of 46 different types of energy inefficient and environmentally unacceptable lamps, which will be replaced by high-efficiency LED lamps, they stated from the Dubrovnik city administration, emphasising that this will contribute to further environmental protection and the overall energy efficiency of Croatian public lighting systems.

They also stated that the annual financial savings on electricity costs that will be achieved by this reconstruction and modernisation of the Dubrovnik public lighting system, when compared to the current situation, will be more than two million kuna, and will significantly reduce the cost of maintaining the system on top of that as well.

The money needed for this Dubrovnik-based project will be secured by a HBOR loan with a repayment period of seven years and a fixed interest rate of 0.5 percent.

For more, make sure to check out our dedicated lifestyle section.


Saturday, 7 May 2022

FinMin Says Still No Solution For Brodosplit Shipyard

ZAGREB, 7 May 2022 - Finance Minister Zdravko Marić on Saturday denied Brodosplit CEO Tomislav Debeljak's statement that a solution had been found for the shipyard, saying talks are under way and that the situation is very complex.

"Unfortunately... no agreement has been reached," Marić told the press.

He said the Brodosplit situation became even more complex in the past few weeks due to the opening of pre-bankruptcy proceedings. They imply an additional procedural as well as "temporal component" regarding the approval and regime of state aid, he added.

Also, he said, the Finance Ministry has been analysing the technical, legal and financial justification of a protested guarantee request.

Our talks and cooperation with the HBOR (Croatian Bank for Reconstruction and Development) are in line with that, Marić said, regretting that "such conclusions have been made" based on "certain talks, questions asked and answers given."

He would not say if the situation was closer or farther from an agreement being reached, saying it is still not clear if the business model in question is viable.

Marić said the HBOR had a very responsible approach to its job  and that he was sorry it was exposed to "such pressure" only for showing good will.

Earlier today, Debeljak told N1 television that a meeting was held at the HBOR two days ago, that a solution had been found and that Brodosplit's problem would be solved in three months.

Late in March, the shipyard said €60 million from loans given by the Russian-owned VTB Europe bank it was using to finance the building of two ships had been blocked. The bank is subject to restrictions due to Russia's invasion of Ukraine.

Brodosplit asked the government to support a proposal that the loans be rescheduled with HBOR funds. One loan would be repaid by the end of the year and the other over a longer period of time, which would allow the shipyard to operate normally.

Earlier this week, Debeljak filed a second pre-bankruptcy motion for Brodosplit after the first one was dismissed due to procedural error.

According to unofficial reports, HBOR is willing to lend the money to Brodosplit pending a government decision.

For more, check out our business section.


Tuesday, 6 July 2021

€40m Transfer Technology Fund to be Established

ZAGREB, 6 July, 2021 - Investment in private equity in Croatia stands at 0.3% of GDP, whereby it lags behind the most successful countries in that segment, the Croatian Bank for Reconstruction and Development (HBOR) CEO said on Tuesday, adding that the HBOR would participate in launching a €40 billion technology transfer fund.

Tamara Perko was speaking at the Bestinvest.hr conference organised by the Croatian Private Equity and Venture Capital Association, at which awards for the best private equity and venture capital investment were presented.

Perko said the HBOR contributed significantly to the development of private equity and venture capital in the past two years.

She said that together with the European Investment Fund (EIF) and private investors, the HBOR invested in  €46 million worth FIL Rouge Capital, the first venture capital fund investing only in Croatia.

Last year the HBOR, together with the EIF, established three more equity funds in Croatia, the Prosperus Growth Fund, the Adriatic Structured Equity Fund, and the Croatian Mezzanine Debt Fund, investing over €80 million.

Perko said that together with the EIF and the Slovenian development bank, the HBOR planned to invest in a fifth fund, the Transfer Technology Fund. In terms of patents, Croatia is within the EU average, but is near the bottom when it comes to their applicability in the economy, she added.

The purpose of the Transfer Technology Fund is to commercialise science and finance societies that will be established in science and research institutions and work together with the economic sector by providing the necessary products, services and processes, Perko said.

She said that Estonia invested 1.3% in private equity and was among the countries investing the most in that segment, adding that Croatia, with only 0.3%, "must run four times faster to catch up with the best."

Minister underlines importance of industries based on new technologies

Economy and Sustainable Development Minister Tomislav Ćorić underlined the importance of technology transfer and new technologies for the Croatian economy whose development, he said, must be based on those industries.

He said the venture and private equity scene in Croatia developed in a good direction over the past ten, 15 years. The fact that classic financing sources often are not enough additionally underlines the importance of the fund industry, he added.

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

Friday, 18 June 2021

HBOR: Three Seas Investment Fund Collects €1 bn to Date

ZAGREB, 18 June 2021 - The Three Seas Initiative Investment Fund  (3SIIF) has so far raised €1 billion to be used for investing in infrastructure projects, a virtual conference organised by the Croatian Bank for Reconstruction and Development (HBOR) heard on Friday.

The aim of the conference was to illustrate the features of the 3SIIF and the opportunities it offers in terms of financing infrastructure investments.

The fund aims to raise three to five billion euro for this purpose from institutional and private investors, while the goal is to reduce disparities in infrastructure quality in relation to Western Europe as well as generate a profit for investors through investments in the fastest growing region in the EU.

"So far, the Fund has raised more than 900 million euros to be used for investing in infrastructure projects that contribute to security and diversity of energy supply, economic, traffic, social and digital connectivity of the Initiative member countries as well as stronger EU integration by reducing disparities in infrastructure quality," HBOR said in a press release.

The conference was opened by HBOR CEO and 3SSIF supervisory board member Tamara Perko, while Croatia's Foreign and European Affairs Minister Gordan Grlić Radman addressed the conference via video link.

The Three Seas Initiative is a forum of twelve states in the European Union, along a north–south axis from the Baltic Sea to the Adriatic Sea and the Black Sea in Central and Eastern Europe.

Fore more on business in Croatia, follow TCN's dedicated business section.


Monday, 14 June 2021

HBOR And EIB Sign €50m COVID Guarantee Agreement

June 14th, 2021 - The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) on Monday signed the Covid Guarantee Agreement in the amount of €50 million for loans taken by Croatian mid-caps and large corporations to help them recover from effects of the COVID-19 pandemic.

In a joint press release, EIB and HBOR said the EIB contribution valued at €25 billion stems from the European guarantee fund (EGF) set up by EIB in 2020 to accelerate post-COVID recovery, job keeping measures, and to provide much-needed liquidity for European companies.

This is the first EIB operation in Croatia stemming from the EGF, following three EGF operations implemented by the European Investment Fund (EIF). The EIF operations provided guarantees for €350 million in loans. Today’s agreement with HBOR puts the total amount of loans guaranteed by the EGF in Croatia to €513 million,  the press release notes.

Teresa Czerwinska, vice president of the EIB, who is in charge of Croatia, said that the "EIB-HBOR agreement is good news for Croatian economy and local mid-caps and large corporations. It brings further economic relief crucial for faster recovery from the COVID-19 crisis."

Tamara Perko, President of the Management Board of HBOR, said that this Guarantee Agreement "will enable HBOR to approve loans with lower collateral requirements to mid-caps and large companies."

These benefits will be available for direct working capital loans and investment loans to mid-caps under the existing HBOR’s loan programs. It is our pleasure that the EIB has recognized HBOR as its first partner for cooperating under this program in Croatia, which makes it possible for us to offer further benefits to our entrepreneurs irrespective of their size," said Perko.

Croatian companies whose loans were approved six months before the agreement between EIB and HBOR can apply for the guarantees provided the loan agreements were signed after the European Commission approved state support to introduce this financial facility for Croatia.

The EIB reported that the EGF had approved funding amounting to almost half its target for 2021. After clearance under the EU state aid notification process in December 2020, the initiative has now approved €11.7 billion in support of European businesses struggling with the economic fallout of the COVID-19 pandemic. This is almost half the fund’s target for 2021.

The fund mobilizes additional financing, and initiatives approved so far are expected to generate €93.9 billion in funding and investments for the EU economy, the press release notes.

For more, follow our business section.

Friday, 11 June 2021

WB, HBOR Ink €200 HEAL Scheme to Help Croatian Businesses to Have Access to Liquidity

ZAGREB, 11 June 2021 - The World Bank and the Croatian Bank for Reconstruction and Development (HBOR) on Friday signed a Loan Agreement for the HEAL Croatia Project (Helping Enterprises Access Liquidity) in the amount of EUR 200 million intended as support to businesses hit by the corona crisis and the 2020 quakes.

A press release issued by the WB and HBOR reads that "the COVID-19 crisis has caused a sharp decline in the economic activity of Croatian businesses and has had a profound effect on jobs and livelihoods."

"The pandemic disrupted firms’ production and reduced the demand for their goods and services, while the financial sector tightened lending to companies, due to rising credit risk. The crisis also exacerbated Croatia’s regional disparities and reduced credit access for young firms and for firms owned and managed by women."

The HEAL Croatia scheme "will provide liquidity and financial restructuring to firms that have been hit by the COVID-19 pandemic and by the two devastating earthquakes of 2020 and will support an inclusive and resilient recovery. "

The HEAL project will increase access to finance to firms focused on export, both small and medium enterprises (firms employing fewer than 250 people) and mid-caps firms (employing from 250 to 3000 people), as well as for firms from less developed regions of Croatia, and firms owned or managed by women. It will also increase access for young enterprises (operating less than five years).

HBOR management board president Tamara Perko was quoted as saying that the Croatian development bank is pleased " that the World Bank has recognized the significance of financing entrepreneur groups whose importance has also been recognized in HBOR's five-year strategy."

Elisabetta Capannelli, the World Bank Country Manager for Croatia, was quoted as saying that the World Bank looked forward "to a smooth and quick implementation of the HEAL Croatia project which will help preserve jobs and support household livelihoods through direct support to approximately 150 firms employing around 25,000 people."

Finance Minister Zdravko Marić, who signed with the World Bank a contract on loan guarantee, said that "the loan being signed today represents a continuation of the significant support provided by the World Bank to the Republic of Croatia since the beginning of the crisis in 2020, which is reflected in operations worth a total of EUR 760 million (including HEAL)."

"With this project, we are contributing to the further recovery of Croatia’s private sector, following the existing measures of the Government of the Republic of Croatia adopted in the context of the COVID-19 pandemic, post-earthquake reconstruction and creating foundations for future sustainability and resilience."

The World Bank has been a partner to Croatia for over 27 years and during that period the bank has supported more than 50 projects, worth almost US$5 billion, and provided technical assistance to help strengthen institutions and support the design of policies and strategies.

For more on politics in Croatia, follow TCN's dedicated page.

Friday, 28 May 2021

HBOR Offering Favourable Loans to Help Businesses Recover from Pandemic

ZAGREB, 28 May 2021 - The European Investment Fund has approved a €35 million guarantee to the Croatian Bank for Reconstruction and Development (HBOR), allowing it to originate a portfolio of €50 million to mitigate the economic consequences of the COVID-19 pandemic, HBOR said on Friday.

HBOR will approve loans at interest rates reduced by 0.403 percentage points or only with bills of exchange and promissory notes as collateral.

The EIF guarantee stems from the Pan-European Guarantee Fund (EGF), a €25 billion guarantee facility set up by the European Investment Bank Group in 2020 to accelerate the post-COVID-19 recovery of the European economy.

The EGF guarantee will allow HBOR to offer loans to Croatian SMEs and small mid-caps under more favourable terms, including reduced interest rates or lower collateral requirements. The loans will available to SMEs and small mid-caps operating in some of the hardest hit sectors of the Croatian economy, including tourism and manufacturing.

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

Sunday, 23 May 2021

HBOR Representatives Visit Successful Rijeka Project Site

May the 23rd, 2021 - HBOR representatives have been busy touring a highly successful Rijeka project which it has supported with both capital investments and export activities for years.

As Poslovni Dnevnik writes, HBOR representatives, together with the leaders of JGL visited the works on the construction of the Integra 2020 project recently, they also toured its warehousing capacity, which includes three units - one for research and development, one for commercial production and one logistics centre.

"HBOR has been successfully supporting us in capital investments and export activities for many years, recognising us as a company with an international vision, and this is also an opportunity to thank them for our strong cooperation. After supporting the investments in JGL Pharma Valley, Integra 2020 was financed mostly from a long-term loan from HBOR in the amount of 280 million kuna,'' said Mislav Vucic, Executive Director of JGL.

The new investment project will enable the company to increase its capacity of sterile production by as much as 60 percent and significantly raise the development and technological competence of the company and its global competitiveness for further international growth in the planned horizon of one decade.

"JGL is one of the flagships of the Croatian economy, a company that has shown that Croatian businesses can be technological innovators and strong exporters to international markets, in an industry that requires extremely sophisticated products. I'm looking forward to HBOR being part of the growth and development of JGL. I'm convinced that we'll continue to cooperate with JGL and provide support for their new successes by lending and insuring exports,'' said Hrvoje Cuvalo, a member of the Management Board of HBOR, who was among the HBOR representatives visiting the site.

"The role of the Croatian Government and HBOR in terms of encouraging exporters and production companies with the aim of strengthening the competitiveness of the Croatian economy is extremely important. I'm proud that at JGL, despite the coronavirus crisis, are successfully continuing with investments that are an investment in our future, and with which we're striving for further steps in the global health market. It's especially important that the Integra 2020 project, through new research and development capacities, will enable even stronger networking with the scientific and teaching sector, as well as strengthening the platform for further growth of our country in the field of pharmaceutical and biotechnological development,'' concluded JGL's Ivo Usmiani.

KBC Rijeka - The construction of a new hospital for mothers and childern in Susak

The group of HBOR representatives also visited the Rijeka Clinical Hospital Centre and the construction of the new hospital in Susak, for which HBOR, in cooperation with the CEB and the EIB, approved a loan in the total amount of 750 million kuna.

At the Susak site of KBC Rijeka, work on the construction of a new Rijeka Hospital for mothers and children is in full swing, having started back in September 2019. The new complex will combine all hospital facilities currently located at Kantrida with the Clinic for Gynaecology and Obstetrics and new laboratory facilities.

This project is a significant step forward in relocating hospital units to a unique location, and patients will no longer have to travel up to five kilometres between different hospital facilities of the Rijeka Clinical Hospital.

“The construction of a new hospital in Rijeka is the largest investment from the government in the healthcare system since the founding of the Croatian state. Regardless of all of the difficulties, the works are being implemented more quickly than was initially planned, and the completion of the works is expected in the first half of 2022. If we receive the support of the government as we have done before, we'll be ready for the next investments in the second half of 2022,'' said Zeljko Plazonic, MD, of KBC Rijeka.

"The investment of KBC Rijeka in the construction of a new hospital in Susak will directly affect 600 thousand citizens who gravitate to the Rijeka hospital and hundreds of thousands of others who spend their holidays in this area. That's why I'm extremely glad to have the opportunity to participate in the improvement of healthcare infrastructure that will provide patients, medical and university staff of the Clinical Hospital Center Rijeka with greater comfort, an increased quality of services and numerous technological and clinical improvements,'' stated Hrvoje Cuvalo of HBOR.

"With the completion of the new hospital project, KBC Rijeka will receive a quality, modern and efficient healthcare service to be able to offer to the residents of the three counties who use the services of the Rijeka hospital," added prof. dr. sc. Alen Ruzic, the director of KBC Rijeka.

For more, follow our dedicated business section.

Thursday, 6 May 2021

HBOR Aided Croatian Companies with 8 Billion Kuna During 2020

May the 6th, 2021 - HBOR (Croatian Bank for Reconstruction and Development) supported Croatian enterprises throughout the coronavirus-dominated year of 2020 with almost eight billion kuna.

As Novac writes, throughout 2020, the Croatian Bank for Reconstruction and Development held Croatian companies up with an enormous amount of money, around 8 billion kuna, which is 13 percent more than was needed back in pre-pandemic 2019, as was announced in the audited annual financial report issued by HBOR for last year.

In total, HBOR supported more than 1,800 projects of Croatian enterprises back in 2020, and last year, HBOR approved 43 percent of the total amount of loans granted by banks in Croatia to business entities under the COVID-19 measures. In order to mitigate the consequences of the ongoing pandemic, HBOR put almost half of its total gross loan portfolio in a moratorium that companies could access and use for a period of up to 16 months, the Croatian Bank for Reconstruction and Development announced.

HBOR's operations during 2020 were marked by activities related to mitigating the negative consequences of the COVID-19 pandemic on the operations of Croatian businesses, and back at the end of March 2020, the very first COVID-19 measures for preserving the liquidity of such companies and jobs were adopted.

''2020 was exceptionally challenging for us, both because of the pandemic and because of the earthquake that severely damaged our headquarters. In such a year and in such changed working conditions, HBOR approved as much as 43 percent of all COVID loans across Croatia. This share is especially pronounced if we take into account the fact that HBOR has only 2 percent of the employees and 6 percent ofthe  assets in the whole banking system,'' said the President of the Management Board of HBOR, Tamara Perko on the occasion of the publication of their annual report.

Under the COVID-19 measures, Croatian business owners were given the opportunity to use the aforementioned moratorium for up to 16 months and to reschedule their existing obligations. During the approved moratorium, HBOR didn't charge their clients regular interest rates or fees, and clients were allowed to use the moratorium despite the fact that HBOR was still obliged to regularly settle its obligations to creditors without the possibility of using the moratorium itself.

The offered possibility of using the moratorium was accepted by clients for more than 1,600 approved loans.

Within the general scope of the COVID-19 measures, HBOR, both directly and in cooperation with commercial banks, provided loans to domestic business owners at an interest rate of as little as 0 percent without the usual fees. By the end of 2020, under lending programmes under those same COVID-19 measures, HBOR approved almost 1.3 billion kuna in loans, which is 43 percent of the total amount of loans granted to Croatian businesses under the COVID-19 measures during 2020.

In order to encourage commercial banks to grant new liquidity loans to companies, HBOR introduced new ways of securing loans as part of the COVID-19 measures and issuing guarantees that assume up to 90 percent of the risk of loan repayment. In addition to HBOR's insurance, banks granted 1.24 billion kuna in liquidity loans to companies back in 2020.

The largest users were small and medium-sized enterprises, and exporters were supported by 4.7 billion kuna

In addition to approvals issued under the COVID-19 measures, HBOR continued to implement all its existing lending programmes for investments and working capital and financial instruments, export credit insurance programmes and encouraging the development of the venture capital market, as well as other similar activities.

Due to the circumstances caused by the coronavirus pandemic, 2020 was marked by the use of moratoriums and loans to maintain corporate liquidity. However, even in these conditions, more than 50 percent of HBOR's approvals were intended for investments. The share of approved loans for investments is important because they represent investments that are focused on the development of one particular area, increasing the competitiveness of businesses, investments in new technologies and production, and new employment.

The most numerous beneficiaries of HBOR's loans in 2020 were small and medium-sized Croatian enterprises, to which 1,168 loans were approved, ie 88 percent of the total number of approved loans during 2020. Last year, HBOR supported Croatian exporters in more than 800 projects with a total amount of almost 4.7 billion kuna.

Capital investment market development

A series of analyses indicate that, due to the poorly developed risk and equity capital market, Croatian micro, small, medium and medium capitalised companies face the challenge of finding appropriate sources of financing. For this reason, HBOR has recently launched a number of initiatives to develop this market in order to provide adequate resources to help the growth of entrepreneurial activities.

During 2020, two new venture capital funds started operating within the CROGIP programme and preconditions were created for the start of the third, and through the VC fund Fil Rouge Capital (FRC2), which was established back in 2019 with HBOR's support. Due to the consequences of the ongoing pandemic, the need for funds for investment in risk or quasi-risk capital is expected to increase further, and HBOR's activities will continue in the same sense in the future.

For more, follow our business section.

Tuesday, 27 April 2021

PM Andrej Plenković: At The Moment I Don't See That Gabrijela Žalac is Guilty of Anything

ZAGREB, 27 April, 2021 - Prime Minister Andrej Plenković said on Tuesday that at the moment he did not see that former minister Gabrijela Žalac, an official of the Croatian Democratic Union (HDZ), is guilty of anything after the USKOK anti-corruption office expanded its investigation in the windpark scandal.

"I read the press release for my information. Our judicial bodies are independent. You are aware of our position - we have zero tolerance to corruption. I don't what is behind that and I cannot deduct from the press release what exactly it has to do with," Plenković told reporters during a visit to Split-Dalmatia County.

I don't have any information about what USKOK and the State Prosecutor (DORH) are doing.

What he does know is that the loan in question was approved, as far as he is aware, in accordance with the Croatian Bank for Reconstruction and Development (HBOR) rules.

"We have to see here what this is about exactly. At the moment I don't know nor do I have any detailed information of what USKOK or DORH are working on. She is a member of the HDZ. At the moment I don't see that she is guilty of anything," said Plenković.

He claimed that he saw Žalac about a month ago but they did not discuss the windpark case.

"She will deal with this situation on her own and as far as our relationship is concerned, it is as it was in any case," underscored Plenković.

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

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