The World Bank and Croatia's state-owned development bank HBOR on Friday signed a Loan Agreement for the so-called HEAL Croatia Project (Helping Enterprises Access Liquidity) worth €200 million designed to help businesses hit by the corona crisis and the 2020 quakes in Zagreb and Petrinja.

A press release issued by the World Bank and HBOR said that “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 disrupted firms’ production and reduced the demand for their goods and services, while the financial sector tightened lending to companies, due to rising credit risk. The crisis also exacerbated Croatia’s regional disparities and reduced credit access for young firms and for firms owned and managed by women.”

The HEAL Croatia scheme “will provide liquidity and financial restructuring to firms that have been hit by the Covid-19 pandemic and by the two devastating earthquakes of 2020 and will support an inclusive and resilient recovery. ”

The HEAL project will increase access to finance to firms focused on export, both small and medium enterprises (firms employing fewer than 250 people) and mid-cap firms (employing from 250 to 3000 people), as well as for firms from less developed regions of Croatia, and firms owned or managed by women. It will also increase access for young enterprises (operating less than five years).

HBOR management board president Tamara Perko was quoted as saying that the Croatian development bank is pleased ” that the World Bank has recognized the significance of financing entrepreneur groups whose importance has also been recognized in HBOR’s five-year strategy.”

Elisabetta Capannelli, the World Bank Country Manager for Croatia, was quoted as saying that the World Bank looked forward “to a smooth and quick implementation of the HEAL Croatia project which will help preserve jobs and support household livelihoods through direct support to approximately 150 firms employing around 25,000 people.”

Finance Minister Zdravko Maric, who signed with the World Bank a contract on loan guarantee, said that “the loan being signed today represents a continuation of the significant support provided by the World Bank to the Republic of Croatia since the beginning of the crisis in 2020, which is reflected in operations worth a total of €760 million (including HEAL).”

“With this project, we are contributing to the further recovery of Croatia’s private sector, following the existing measures of the Government of the Republic of Croatia adopted in the context of the Covid-19 pandemic, post-earthquake reconstruction and creating foundations for future sustainability and resilience.”

“The World Bank has been a partner to Croatia for over 27 years and during that period the bank has supported more than 50 projects, worth almost $5 billion, and provided technical assistance to help strengthen institutions and support the design of policies and strategies,” state agency Hina reported.