croatia case studies

Signed projects

Board approval is the final stage in the project approval process. After Board approval, the EBRD and the client sign the deal and it becomes legally binding. Signed project lists reflect year-end data.

Signed projects  (0.1Mb)

Case studies

Municipal and environmental infrastructure

Small enterprises

European cooperation to support small businesses - Sustainability Report

One of the ways the Bank has supported SMEs is through the EU/EBRD SME Finance Facility. Established in 1999, the Facility is the EBRD’s Bank’s main instrument for financing small businesses in the new EU member states and EU candidate countries. It now focuses on Bulgaria, Croatia and Romania. The EBRD funding available through this Facility amounts to €1.35 billion supported by €180 million of EU grant funds, which are used to provide financial incentives and technical assistance to participating FIs. The technical assistance is especially valuable in improving the capacity of local FIs to provide appropriate financing products and service to SMEs on a sustainable basis.

By the end of 2008, the EBRD had provided 124 credit lines totalling €1.2 billion to 43 banks and 39 leasing companies in the 11 countries covered by the Facility. In total, over 100,000 transactions worth more than €2 billion have been undertaken with small businesses throughout the region. The average loan size for each business is as low as €23,000 while leases average €21,000; the small size of the transactions indicates that the smallest enterprises are being reached successfully by the Facility.

In 2008, the EBRD established its first credit line facility of €40 million, in partnership with two Romanian banks, to address the financing needs of SMEs in the areas of environmental protection, product safety and quality, and occupational health and safety. The Facility is supported by €10.2 million in grant resources, provided by the EU and the Romanian government, to fund financial incentives and technical assistance support for the SMEs to improve their environmental and health and safety standards.

A new lease of life in Croatia - 2008

Starting or expanding a business can seem a daunting, if not impossible, task – not least during a financial crisis. However, leasing offers a lifeline for companies that do not have the cash to fund all their equipment needs from the outset.

The EBRD is seeking to strengthen and expand leasing to small and medium-sized enterprises (SMEs) in Croatia. In 2008 the Bank provided a €15 million loan to Raiffeisen Leasing under the EU/EBRD SME Finance Facility, which was set up exclusively for the financing of leases. In addition, Raiffeisen Leasing will receive more than €875,000 in technical assistance from the European Commission.

Raiffeisen Leasing is the third-largest leasing company in Croatia with a market share of 8 per cent. Its success has been based on the quality of the assets that it owns, as good equipment means lower service and maintenance costs. Its huge product range – over 100 – and variety of assets also provide security. While many of Raiffeisen’s clients are family-owned agricultural businesses needing crop harvesting equipment, newly emerging industries, especially those using the latest technology such as digital printing, are also looking for leasing finance.

The company is already putting the EU funds allocated for technical assistance to good use. It is deploying the first tranche of €100,000 to train its management and sales employees with the help of Croatian and British consultants.

The European Union is the largest contributor to the EBRD with €521.4 million having been committed to the EBRD-EU technical cooperation fund since 1991. EU funding covers areas ranging from support for small business to the improvement of safety at nuclear power stations.

In Russia, EU funding has helped the EBRD increase lending to the municipal sector, improve lending to SMEs, promote private sector development and enterprise restructuring and improve infrastructure.

Supporting micro and small businesses in Croatia and Romania - Donor Report 2007

In 2006 state-owned Hrvatska Poštanska Banka became the first Croatian bank to join the EU/EBRD SME Finance Facility, receiving a €10 million loan for on-lending to small and medium-sized enterprises. The loan is complemented by a €1.4 million grant from the European Union for technical assistance and performance-based fees. Sub-loans of up to €30,000 will be made available to local companies with fewer than 10 employees, while companies with up to 100 employees will be eligible for loans of up to €125,000.

Opportunity Micro-Credit Romania (OMRO), based in Targu Mures, will be the first microfinance institution to receive funding under the new Romania Micro Credit Facility (see page 57). OMRO’s €2.8 million loan will enable it to build on its existing portfolio of micro-business clients. Typical sub-loans to micro and small enterprises will be under €10,000 and will target businesses employing nine people or fewer.

Municipal and environmental infrastructure

Respecting the natural environment of a port in Croatia - Sustainability Report 2007

Located at the mouth of the River Neretva on Croatia’s beautiful Dalmatian coast, is the port of Ploče .

Like many of the region’s transport hubs, it has become increasingly busy in recent years, not least because it is at the beginning of the trans-European corridor, linking Croatia and Bosnia and Herzegovina to Hungary and the growing markets of central Europe. With annual cargo volume expected to increase from 2 million tonnes in 2004 to 7.2 million tonnes in 2010, it has become vital to upgrade the port’s infrastructure and operational capabilities. It has been made clear, however, that any development needs to respect the environment as the Neretva river delta has been included in the Ramsar Convention list of wetlands of international importance. The viability of the region’s increasingly lucrative tourism sector is linked to perceptions of a protected natural environment.

The EBRD is lending €11.2 million to the Port of Ploče Authority to contribute to the construction of a new bulk cargo terminal, but the loan was only agreed after an environmental impact assessment (EIA) had been carried out in accordance with EBRD and World Bank requirements. The EIA revealed several aspects of the port’s current operations that have negative impacts onthe town’s population and the coastal environment, as well as potential hazards from the proposed development. The construction of a new terminal will allow for the elimination of most of the current environmental problems by relocating the terminal further away from Ploče itself and introducing cleaner bulk cargo handling and storage technology. Special attention has been paid to the protection of the ecologically valuable Neretva river delta.

Before the project began, local stakeholders, NGOs and relevant authorities were engaged in a series of consultations regarding the project generally and the EIA specifically

This resulted in changes to the design of the project, including shifting the berth of the new terminal to reduce the size of the area needing dredging and avoiding any intrusion into the Ramsar site.

Clean water for Karlovac - Donor Report 2006

The EBRD is supporting the construction of a wastewater treatment plant in Karlovac with a €10 million loan. The central Croatian city currently has almost no waste-water treatment facilities. Approximately 80,000 people live in the region and effluent is discharged untreated into the Korana, Mreznica and Kupa rivers, which eventually flow into the Danube.

The project has received a €22.5 million grant under the EU Instrument for Structural Policies for Pre-accession (ISPA). Croatia became eligible for funding for environmental projects as part of the EU accession process and must comply with EU environmental requirements.

The ISPA grant, together with the EBRD loan and Croatian government support, will enable the construction of a waste-water treatment plant, as well as additional improvements to the ageing sewerage system. The company will enter into a service agreement with the city authorities, which will introduce commercial principles and gradually eliminate cross-subsidies.

The Italy-EBRD Private Sector Development Fund provided €300,000 in support of financial and operational improvements at the plant in 2005.

Easing congestion and air pollution in Pula - Sustainability Report 2006

Pula is the economic and political centre of the Istrian peninsula in Croatia, with a population of around 60,000. It is a popular tourist destination and suffers from serious traffi c congestion and a lack of parking, particularly in the busy summer period. The shortage of spaces and illegal parking in the historic Old Town create congestion and pollution as cars drive around the city centre to fi nd space to park.

The EBRD is lending €5 million to enable the city’s bus company to buy up to 22 modern low-fl oor buses. The new fl eet will comply with national and EU standards for emissions, which will signifi cantly reduce air and noise pollution. The new buses will meet fuel effi ciency and accessibility requirements for disabled people, which will further improve the city’s environment and encourage more people onto buses. Bus maintenance workshops will be modernised to improve the storage and disposal of oils and fuel.

The Bank is also providing €250,000 of donor funding to the local authority for a study into traffic management and to implement an action plan for developing a sustainable public transport strategy. The Netherlands government has provided a further €50,000 in technical cooperation funds for project preparation and to evaluate the current traffi c and parking management in Pula.

The service agreement signed by the city of Pula and the bus company (Pula Promet) establishes a clear commercial basis for public transport and also increases transparency and accountability. The mayor of Pula, Boris Miletic´ , said the new transport strategy sets European targets for the development of the city’s urban transport system. It will also provide a better, safer and cleaner service for residents and visitors to Pula.