ZAGREB, October 29, 2012 - Anton Kovačev, President of the Managing Board of the Croatian Bank for Reconstruction and Development and Hongjoo Hahm, World Bank Country Manager, signed today an additional financing loan for the Croatia Export Finance Intermediation Project (CEFIL) in the amount of EURO 50 million (USD$61.41 million equivalent). The Croatian Minister of Finance, H.E. Slavko Linić also signed a Guarantee Agreement with the Bank for the loan.
The loan was provided to the Croatian Bank for Reconstruction and Development to continue supporting the private sector’s access to finance in an environment of constrained funding due to the impact of the eurozone crisis, and to further boost competitiveness, particularly among exporters, as Croatia prepares to join the European Union.
The additional finance will help scale up the ongoing CEFIL Project (original amount of EURO 100 million) which has already achieved impressive results. So far, 58 exporting companies benefited from access to medium- and long-term finance. The funding helped them strengthen their financial position and helped companies ride out the 2010 crisis. Exports of the supported companies, which account for five percent of total exports, grew by more than 30 percent. While the crisis has left many people jobless, access to the project’s funds enabled most of the companies to preserve their current workforce and even create new jobs.
The Croatian Bank of Reconstruction and Development will continue to make the project funds available to commercial banks, which, in turn, will on-lend to eligible private sector exporters, at market rates.
“The loan will make it possible for us to continue financing tourism and exports as key sectors of the economy of the Republic of Croatia, particularly under the current conditions of limited access to loans on the financial market. During this year, HBOR approved almost HRK 4.4 billion in loans for the financing of exports, including tourism. This represents an increase of 30 per cent as compared to the same period last year,” said Anton Kovačev, President of the Managing Board of the Croatian Bank for Reconstruction and Development.
“Following the successful implementation of the ongoing Croatia Export Finance Intermediation Project, the government is pleased to continue supporting the World Bank's partnership with the Croatian Bank for Reconstruction and Development. This loan will further benefit Croatian companies in accessing much needed financing. Our role is to continue to support the Croatian Bank for Reconstruction and Development in their increased efforts to assist the private sector. Our goal through this loan is for the eligible private sector exporters to significantly contribute to the growth of exports, which should result in greater job creation and overall economic growth in Croatia,” said H.E. Slavko Linić, Minister of Finance of the Republic of Croatia.
“The global economic recession followed by the eurozone crisis has affected all economies in the region, including Croatia. Constrained liquidity in global financial markets has tightened access to medium- and long-term financing for many private enterprises – which are the main engines of growth and job creation,” said Hongjoo Hahm, World Bank Country Manager for Croatia. “Through this additional financing loan, we will continue helping the Government of Croatia by offering long-term financing to exporters so they can continue to invest in their businesses and create jobs.”
Since joining the World Bank in 1993, Croatia received support from the global development institution in the form of financial and technical assistance, policy advice, and analytical services. To date, the Bank has supported 47 projects in the amount of US$3.3 billion, and it has approved 52 grants with a total value of US$70 million.