The European Commission has today disbursed €818 million to Croatia in a pre-financing payment under the Recovery and Resilience Facility (RRF), the Croatian government reported on Tuesday.

“This is equivalent to 13% of the country’s total financial allocation under the RRF,” the European Commission says on its website.

“The pre-financing payment will help to kick-start the implementation of the crucial investment and reform measures outlined in Croatia’s recovery and resilience plan.

“Croatia is set to receive a total of €6.3 billion under the RRF. The Commission will authorise further disbursements based on the implementation of the investments and reforms outlined in Croatia’s recovery and resilience plan,” says the EC.

“Today’s disbursement follows the recent successful implementation of the first borrowing operations under NextGenerationEU. By the end of the year, the Commission intends to raise up to a total of €80 billion in long-term funding, complemented by short-term EU-Bills, to fund the first planned disbursements to Member States under NextGenerationEU,” says the Commission on its website.

Croatian Prime Minister Andrej Plenkovic said today that this pre-financing sum means the beginning of the implementation of the investments prepared under the National Recovery and Resilience Plan in the period from 2021 to 2026.

This plan was green-lighted by the EC in early July.

After the period of preservation of jobs and economic stability in the circumstances marked by the COVID-19 pandemic, we are now committed to the reform processes and to the utilisation of the funds from the EU for the fast economic recovery and development along the clear direction towards dual transition: digital and green, said the premier.

Securing the green transition

Commenting on the green transition, the EC recalls that “the Croatian plan will invest €728 million to support sustainable mobility by upgrading railway lines, developing autonomous electric taxis with supporting infrastructure adapted for people with disabilities, installing 1,300 charging stations for electric vehicles, and introducing zero-emission vehicles and vessels.

Supporting the digital transition

As for supporting the digital transition the EC says that “the plan will provide €126 million to improve digital connectivity of rural areas, by increasing national broadband coverage with gigabit connectivity in rural areas and the construction of electronic communications infrastructure.”

“It will also invest €287 million to support the digital transition of the public administration, including the digitalisation of the justice system, the interoperability of the government’s information systems, the deployment of the Digital Identity Card, the introduction of smart working arrangements and the creation of a one-stop-shop for all public administration’s online services.”

Reinforcing economic and social resilience

Concerning the reinforcing economic and social resilience the EC says that Croatia’s plan “will provide €739 million to improve the business environment by reducing the administrative burden, lowering regulatory requirements for professional services, and increasing access to financing for businesses.”

“It also foresees €200 million to increase the efficiency of the public sector and the justice system.

“The plan will also invests €277 million to support employment and social inclusion by redesigning active labour market policies to boost employment and self-employment, funding vouchers for training and upskilling programmes, improving the adequacy, targeting and coverage of social benefits and developing new social services.”

Croatia’s 1,110-page document contains a description of 77 reforms and 152 investment projects.

The effects of the Recovery and Resilience Plan are expected to help the national economy to rise at a rate of 5.2% in 2021, which is 0.3 percentage points more than its previous forecast. Economic activity is expected to pick up at a rate of 6.6% in 2022, 4.1% in 2023, and 3.4% in 2024, and expand by 2.7% in 2025.