WASHINGTON, June 27, 2013—The World Bank’s Board of Executive Directors today approved a Partial Credit Guarantee (PCG) of up to EUR200 million (US$256.40 million equivalent) to the Croatian Bank for Reconstruction and Development (HBOR) for commercial lending of up to EUR250 million for the Croatian Export Financing Guarantee Project (CEFGP).
“The global economic recession, followed by the eurozone crisis, has affected all economies in the region, including Croatia’s,” said Mamta Murthi, World Bank Regional Director for Central Europe and the Baltic Countries. “Limited liquidity in global markets has meant restricted access to medium- and long-term financing for many private enterprises, which are an important engine for growth and job creation. By providing additional financial resources to Croatia’s exporters, this guarantee will ease that restriction.”
The PCG is intended to mobilize lending through HBOR to the commercial banking sector. The PCG will help HBOR raise funds from the market at more competitive terms and for longer maturities than it could without a guarantee. The funding raised will be on-lent through HBOR to Croatian exporters. This continued access to finance in an environment of constrained funding, due to the impact of the Euro Area crisis, will further boost the competitiveness of the Croatian export sector as the country enters the European Union.
Added Murthi, “Through this Partial Credit Guarantee, we continue helping HBOR secure long-term financing for exporters so that they can continue to invest in their businesses, upgrade their technologies, and create jobs in an increasingly competitive environment. This innovative product is also in line with the aim of the World Bank Group’s new Country Partnership Strategy with Croatia, that of helping Croatia boost its competitiveness.”
Since joining the World Bank in 1993, Croatia received support from global development institutions in the form of financial and technical assistance, policy advice, and analytical services. To date, the Bank has supported 48 projects in the amount of US$3.3 billion, and it has approved 52 grants with a total value of US$70 million.