The government on Thursday gave the Economy Ministry permission to sign a contract with Rijeka's 3. Maj shipyard for the completion of a ferry and approved a €22 million loan with the Croatian Bank for Reconstruction and Development (HBOR) to finance the completion of the vessel.

This decision follows up on the government decision of 1 August 2019 to get involved in unblocking the shipyard’s account, the preparation and relaunch of production and the completion of vessels on which work had begun, said the Minister of Economy and Sustainable Development, Tomislav Coric.

The vessel in question was part of the bankruptcy estate of the Uljanik shipyard and the Ministry of Finance has purchased it at a public electronic auction, becoming its full owner.

The government also amended its earlier decision to grant a state guarantee in favor of the HBOR and/or other commercial banks in the country and/or abroad for a loan to finance the construction of a new passenger ship, because of changes to the construction and payment schedule.

Last September, the government granted a state guarantee to secure financing for that ship, which the MKM Yachts company had agreed with PEC 2 Limited. The state guarantee, granted in favour of the HBOR or other commercial banks in the country and abroad, amounts to €80.13 million, which is 80% of the total loan of MKM Yachts.

The decision was amended because negotiations with commercial banks had taken longer than expected. The funds guaranteed by the government can be activated only after the buyer has made an advance payment to the shipbuilder. Advance payments will be made from April to June 2021, and the vessel is due to be completed by June 2023, Coric said.