Gov't decides to initiate two loan agreements with World Bank worth €476M

NEWS 21.05.202019:20

The government on Thursday decided to initiate the signing of two loan agreements with the World Bank, one worth €200 million for post-earthquake reconstruction and a stronger COVID-19 response, and one worth €275.9 million for a broader crisis response and recovery support.

The €200 million loan agreement will be signed with the International Bank for Reconstruction and Development, which is part of the World Bank Group, and it will be used ro renovate buildings damaged in the March 22 quake in the Zagreb area.

Construction Minister Predrag Stromar said reconstruction, according to experts’ most optimal model, would cost HRK 42 billion.

Prime Minister Andrej Plenkovic said Zagreb Faculty of Civil Engineering representatives estimated that the reconstruction of all buildings damaged in the earthquake to meet the maximum technical and seismic requirements would cost €13 billion.

He said that “through discussion we will arrive at solutions and amounts that are appropriate.”

Finance Minister Zdravko Maric said that in early April, faced with the effects of the COVID-19 pandemic on Croatia’s economy and public finances, as well as the earthquake damage, his ministry contacted the World Bank to ask for support.

A loan was drawn up to ensure quick liquidity for the state budget, comprising nine measures to mitigate the immediate social and economic effects of the crisis and to set the foundations for promoting inclusive and sustainable recovery, said Maric.

The measures pertain to government aid to employers for the payment of three months’ wages if they do not lay off workers, the introduction of a national allowance for persons over 65, the amendment of national rules for the absorption of EU funds, and support for investment during economic recovery.