Tamara Perko, Chairman of the Board of Directors of the Croatian Bank for Reconstruction and Development (HBOR) and Elisabetta Capannelli, World Bank Country Director for Croatia, signed a loan agreement for the HEAL Croatia project (Helping Enterprises Access Liquidity) in the amount of EUR 200 million (equivalent to $ 242 million). Croatian Deputy Prime Minister and Minister of Finance Zdravko Marić also signed a guarantee agreement with the Bank for the loan. The HEAL Croatia project will provide liquidity and financial restructuring to businesses that have been affected by the COVID-19 pandemic and the two devastating earthquakes of 2020 and support an inclusive and resilient recovery.
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 has disrupted business production and reduced demand for their goods and services, while the financial sector has tightened lending to businesses, due to increased credit risk. The crisis has also exacerbated regional disparities in Croatia and reduced access to credit for start-ups and for businesses owned and managed by women.
To mitigate these negative effects, the HEAL project will increase access to finance for export-oriented enterprises, both small and medium-sized enterprises (enterprises employing less than 250 people) and mid-cap enterprises (employing 250 to 3000 people), as well as for businesses in less developed regions of Croatia, and businesses owned or run by women. It will also increase access for start-ups (in business for less than five years). The project will support the continued development of HBOR through improved business processes, enhanced sustainability and resilience to climate change, and the use of EU funds.
“The loan signed today is a continuation of the significant support provided by the World Bank to the Republic of Croatia since the onset of the crisis in 2020, which translates into operations totaling 760 million euros. ‘euros (including HEAL). With this project, we are contributing to the further recovery of the Croatian private sector, in line with the existing measures of the Government of the Republic of Croatia adopted in the context of the COVID-19 pandemic, the post-earthquake reconstruction and the establishment of foundations for future sustainability and resilience, ”said Zdravko Marić, Deputy Prime Minister and Minister of Finance of the Republic of Croatia.
“The terms and conditions granted by the World Bank will provide us with an additional source of financing for the provision of more advantageous loans to our entrepreneurs. We are pleased that the World Bank has recognized the importance of financing entrepreneurial groups whose importance has also been recognized in HBOR’s five-year strategy. Exporters and entrepreneurs from underdeveloped areas are one of them. In addition to granting favorable financing conditions, the World Bank will support us in improving our environmental and social management system. This will be important as HBOR’s activities in the coming period will be particularly focused on capacity building to support sustainable projects and inclusive growth, ”said Tamara Perko, Chair of the Board of Directors of HBOR.
“We look forward to a swift and smooth implementation of the HEAL Croatia project which will help preserve jobs and support household livelihoods through direct support to around 150 businesses employing around 25,000 people. The project will contribute to a resilient, inclusive and sustainable recovery in Croatia, which was hit hard by the global pandemic, economic recession and devastating earthquakes of March and December 2020, ”said Elisabetta Capannelli, National Director of the World Bank for Croatia.
The HEAL Croatia project complements two other World Bank crisis operations approved last year, the Croatia Crisis Response and Recovery Program and the Earthquake Recovery and Public Health Preparedness Project – worth a total of $ 500 million, to help mitigate the effects of the economic shock, advance recovery, facilitate post-earthquake reconstruction and strengthen national public health preparedness systems for pandemic outbreaks. The Justice for Business project focused on improving business regulatory procedures and justice service standards for businesses and citizens was also approved in March 2020, bringing World Bank support to the country to $ 760 million. euros as part of the current national partnership.
The World Bank has been a partner of Croatia for over 27 years. During this period, the Bank has supported more than 50 projects, worth nearly $ 5 billion, produced numerous studies and provided technical assistance to help strengthen institutions and support the design of policies and strategies. The Bank’s current program focuses on mitigating the economic and social impact of COVID-19, post-earthquake reconstruction, transport, justice, innovation, business environment, land administration , science and technology and economic development of the Pannonian region.