The EBRD is providing a €4.8 million loan to Vodoskok d.d., the Croatian market leader in pipe and fitting systems for water supply infrastructure projects. The financing will enable the company to expand in response to accelerating demand.
In the wake of Croatia’s EU accession on 1 July 2013 the country is planning massive investments in all forms of water management in order to comply with EU regulations. These upgrades will take place over the next ten years and will include water supply systems, sewage and wastewater treatment infrastructure and irrigation systems.
As the local market leader Vodoskok is well placed to benefit from these investments. To meet demand the company is initiating a major expansion that will focus on its subsidiary Heplast-pipe d.o.o., the foremost Croatian producer of PE/HDPE pipes and PP/PE corrugated pipes.
The total planned investment is €8.8 million. It will help Vodoskok to secure its position through new products and markets, improve gross margins and speed up regional expansion.
Vedrana Jelušić Kašić, EBRD Director for Croatia, said: “This is a forward-looking investment, which we are pleased to support. Bringing water supply management up to EU standards will increase the quality of supply and improve efficiency. We all know how precious a resource water is, and we welcome its responsible use.”
Davor Meštrović, CEO of Vodoskok, added: “We are proud that the EBRD is concluding this loan agreement with us. The partnership with the Bank will contribute significantly to strengthening our market position and will open up potential for further joint activities. The loan will boost the export capacities of Croatian companies and reduce the need for imported products in infrastructure projects. This will support existing jobs and create new employment opportunities, as well as making us more competitive.”
The loan is being provided under the Local Enterprise Facility, a €400 million facility for investments in enterprises in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia, Kosovo, Montenegro, Romania, Serbia and Turkey, as well as countries in the southern and eastern Mediterranean region (Egypt, Jordan, Morocco and Tunisia). It provides a wide range of flexible financial products, including equity, quasi-equity and debt financing to address the needs of companies.
To date, the EBRD has signed around 150 projects in Croatia for a total amount of more than €2.75 billion. The Bank’s investments are divided between the industry, commerce, agribusiness, energy, financial and infrastructure sectors.