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EBRD cultivates Croatia's agricultural wholesale markets
To assist the development of a modern agricultural wholesale market infrastructure in Croatia, the European Bank for Reconstruction and Development (EBRD) is extending a DM 33.5 million (ECU 17.5 million) loan to the Republic of Croatia. The proceeds of the loan will be on-lent to the National Agricultural Wholesale Market Company (NAWMC).
Hans Christian Jacobsen, Director of the EBRD's Agribusiness activities, commented: "This project continues the innovative public-private sector financing approach of our other wholesale market investments. Together with the client, we have structured the project to bring the disciplines and capital resources of the private sector to public infrastructure financing. For example, in addition to requiring each market to have a minimum percentage of private sector financing from the outset, it is planned that the private sector will, over time, purchase shares held by the NAWMC in the markets, with the eventual aim of at least 49 per cent private sector ownership."
Mr Jacobsen continued: "We are convinced that these wholesale market projects have a strong impact on the development of the agricultural sector in our countries of operations. The EBRD has now developed considerable expertise in structuring and implementing wholesale market projects. In fact, the message we are receiving from other financing institutions and wholesale markets is that the Bank has become a point of reference for the financing of such markets in our countries of operations. This expertise has been recognised by our client and by the local authorities during the preparation of this project."
The EBRD's loan will be used by the NAWMC to finance construction work and the purchase of new equipment to establish and refurbish five new wholesale market facilities in major Croatian cities. The project also includes the establishment of a new wholesale market in Zagreb and refurbishment of a farmers' market in a war-damaged area to be identified. Total project costs amount to US$ 39.6 million (ECU 36 million), of which the state has committed up to US$ 6.5 million.
The Minister of Agriculture and Forestry, Mr Vlado Dominkovic, stated: "Since 1991, many of the established trade channels for fresh agricultural produce have been disrupted in Croatia. The establishment of a national network of wholesale markets for agricultural products will enhance competition in the trade of fresh produce and open new business opportunities for Croatian farmers, intermediaries and transport companies. It will also lower the overall distribution margins and transaction costs to the benefit of both producers and consumers as well as improve the quality and range of products for Croatian consumers."
To date, the EBRD has financed eight similar wholesale market projects in Armenia, Belarus, Bulgaria, Georgia, Hungary, Poland and Romania for a total investment of US$ 274.3 million.
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