(Source: European Investment Bank)
- This Guarantee Agreement provides support to Croatian mid-caps and large corporations to finance recovery from the COVID-19 pandemic;
- The credit line is created under the Pan-European Guarantee Fund (EGF), a €25 billion guarantee fund established by the EIB to accelerate post-COVID recovery of European companies;
- This is the first EGF operation in Croatia for the EIB, and fourth for EIB Group, after the EIF already signed guarantees for €350m of loans for SMEs and mid-caps
- The total amount of loans guaranteed by EGF in Croatia reached €513 million
The European Investment Bank (EIB) and Croatian Bank for Reconstruction and Development (HBOR) have signed the Guarantee Agreement in the amount of €50 million for loans taken by Croatian mid-caps and large corporations to finance their recovery from effects of the COVID-19 pandemic. The EIB contribution stems from the European Guarantee Fund (EGF) set up by the EIB Group in 2020 to accelerate the post-COVID-19 recovery of European economy, safeguard jobs, and provide much needed liquidity to European companies.
This is the first EIB operation in Croatia stemming from the European Guarantee Fund, and the fourth for the EIB Group, 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.
Teresa Czerwinska, Vice-President of the EIB, who is in charge of Croatia, said: “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 of COVID-19, preservation of jobs and incomes and general competitiveness of Croatian companies. Our operation extends the EGF support from SMEs to Mid-Caps and large companies ensuring the recovery support is available to all who need it. I am enormously proud to see that EIB and HBOR continue to deliver effective, timely and hands-on solutions to major economic and social challenges faced by Croatia and the EU, including recovery from COVID-19 as the major challenge of today.”
Tamara Perko, President of the Management Board of HBOR said: “This Guarantee Agreement will enable HBOR to approve loans with lower collateral requirements to mid-caps and large companies, which we have already been able to offer to SMEs and small mid-caps following the conclusion of the Guarantee Agreement with the EIF. 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 out pleasure that the EIB has recognised HBOR as its first partner for cooperating under this programme in Croatia, which makes it possible to us to offer further benefits to our entrepreneurs irrespective of their size.“
EGF already at the half of its 2021 target
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 mobilises additional financing, and initiatives approved so far are expected to generate EUR 93.9 billion in funding and investments for the EU economy. Demand for EGF financing is strong, and further approvals and signatures are expected to rapidly bring the EGF well beyond 50% of its target by early summer.
About the European Guarantee Fund
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion boost those parts of the EU economy that have been hit the worst. Its goal is to ensure that SMEs with sustainable business plans can get the liquidity to overcome COVID-19 related adversities, and that healthy business can get the support they need, in order to grow.
About EIB response to COVID-19
To combat the economic impact of this crisis in Europe and as part of the package of measures the EU is deploying to tackle the economic effects of the pandemic, on 23 April the European Council approved the EIB Group’s creation of a €25 billion Pan-European Guarantee Fund (EGF).
The EIB Group is playing a key role in directly combating COVID-19 by supporting EU efforts to halt the spread of the pandemic, find a cure for the illness and develop a vaccine. To this end, the EU bank is prioritising all investments related to the health sector and research and development programmes focusing on this goal.
The EIB’s current project portfolio for supporting both critical healthcare infrastructure and research and development investments in the EU health sector stands at around €6 billion. The EIB and the World Health Organization also recently signed an agreement to drive cooperation between the two institutions and work together to strengthen healthcare systems in the countries most vulnerable to the pandemic. More detailed information on the support offered by the EIB and EIF