The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) on Monday signed the 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, state agency Hina informed the public on Monday.

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, jobkeeping 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, and 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 was quoted as saying that “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 programmes. It is our pleasure that the EIB has recognised HBOR as its first partner for cooperating under this programme 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 prior to 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 has 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.