EBRD and ZABA launch new risk-sharing facility in Croatia

• EBRD extends €100 million risk-sharing facility to Zagrebačka banka (ZABA) in Croatia.
• Facility will support ZABA’s corporate and SME loan exposure, with EBRD guaranteeing a portion of each loan.
• First transaction under the facility is a €15 million loan to Mlinar pekarska industrija.

The European Bank for Reconstruction and Development (EBRD) has signed a new unfunded risk-sharing facility (RSF) with Zagrebačka banka (ZABA), Croatia’s largest bank, to support lending to local enterprises.

Under the RSF, the EBRD will guarantee up to 65 per cent of each individual loan that ZABA provides to eligible clients. The facility has a total limit of up to €100 million.

The first transaction under this RSF is a €15 million loan to Mlinar pekarska industrija, the leading producer, wholesaler and retailer of baked goods in Croatia and the broader region. The company will use the funds for capital investments, potential acquisitions and working capital. Key initiatives include expanding and renovating its bakery retail network, modernising production processes and pursuing strategic acquisitions.

Under the risk sharing facility the EBRD offers unfunded risk participation mechanisms by guaranteeing the partner bank’s loans to eligible companies. The financial instrument is designed to support small and medium-sized enterprises (SMEs), mid-caps and large corporates, with freed-up capital capacity allowing partner banks to further expand their lending to SMEs.

Miljan Ždrale, EBRD Regional Director for Central Europe said: “This risk sharing facility with Zagrebačka banka will help expand access to finance for Croatian companies by enabling the bank to increase lending while sharing risk with the EBRD. It enables partner banks to better manage their exposure and achieve capital relief, particularly when supporting higher risk and innovative debt structures. The first transaction with Mlinar demonstrates how this instrument can support ambitious local businesses as they invest in modernisation, innovation and growth, strengthening competitiveness in the Croatian food industry and the wider economy."

Aleksandra Rašić, Member of the Management Board of Zagrebačka banka said: “Zagrebačka banka is strongly committed to fostering the growth and resilience of the domestic economy through innovative financial solutions tailored to the needs of our clients. With this and other similar projects that we conduct with EBRD, we enable companies to access more favourable financing, create a stable environment for investment, and support them in their expansion, modernization, and competitiveness in the domestic and international markets, strengthening our economy in general as well. Our successful collaboration with Mlinar continues and we are proud that they recognize us as a reliable partner in their further development.”

Strengthening private-sector competitiveness and supporting local SMEs through indirect financing, including risk-sharing facilities, are among the EBRD’s key priorities in Croatia. As one of the largest institutional investors in the country, the EBRD has, to date, invested more than €5 billion in 275 projects there.