World Bank helps Croatian businesses cope with effects of COVID-19 pandemic

WASHINGTON, May 14, 2021 – The Board of Directors of the World Bank today approved a loan to the Croatian Bank for Reconstruction and Development (HBOR) in the amount of 200 million euros (the equivalent of 242 million dollars) for the HEAL Croatia project (Helping Enterprises Access Liquidity in Croatia). The loan will provide liquidity and financial restructuring to businesses that have been affected by the COVID-19 pandemic and the two devastating earthquakes of 2020. These loans will support an inclusive and resilient recovery.

The COVID-19 crisis has caused a sharp decline in the economic activity of Croatian businesses and has had a profound effect on jobs and livelihoods. The pandemic has disrupted business production and reduced demand for their goods and services, while the financial sector has tightened lending to businesses, due to increased credit risk. The crisis has also exacerbated regional disparities in Croatia, including reduced access to credit for start-ups and for businesses owned and managed by women.

To mitigate the multiple effects of the pandemic, the project will support export-oriented businesses, both small and medium enterprises (enterprises employing less than 250 people) and medium-sized enterprises (employing 250 to 3000 people) . The project will improve access to finance for businesses in less developed regions of Croatia, businesses owned or managed by women and start-ups (in operation for less than five years). The project will also support the continued development of HBOR through improved business processes, strengthen sustainability and resilience to climate change, and the use of EU funds.

“The approval of this project is very important because it provides support to companies affected by the crisis caused by the COVID-19 pandemic, thus ensuring the preservation of jobs and encouraging economic recovery. The added benefit is that it will attract commercial banks to finance the private sector and facilitate the financing of other international financial institutions and help increase the operational efficiency of HBOR. It is important to stress that the World Bank is providing this project under very favorable conditions, ”said Zdravko Marić, Deputy Prime Minister and Minister of Finance of the Republic of Croatia.

> Activities for the coming period will be particularly committed to capacity building to support sustainable projects and inclusive growth, ”said Tamara Perko, Chairman of the Board of Directors of HBOR.

“The HEAL Croatia project will contribute to a resilient, inclusive and sustainable recovery in Croatia, which was hit hard by the global pandemic, economic recession and devastating earthquakes of March and December 2020,” said Elisabetta Capannelli, World Bank Country Director for Croatia. “We expect the HEAL project to help preserve jobs and support household livelihoods through direct support to around 150 businesses employing around 25,000 people. It will also help women-led businesses, start-ups and businesses operating in less developed regions address issues related to longer-term access to finance. “

The HEAL Croatia project complements two other World Bank crisis operations approved last year, the Croatia Crisis Response and Recovery Program and the Earthquake Preparedness and Public Health Preparedness Project – with a total value of $ 500 million for reconstruction after an earthquake and the strengthening of national public health preparedness systems for pandemic outbreaks.

The World Bank has been a partner of Croatia for over 27 years. During this period, the Bank has supported more than 50 projects worth nearly $ 5 billion, carried out numerous studies and provided technical assistance to help strengthen institutions and support the design of policies and strategies. . The Bank’s current program focuses on mitigating the economic and social impact of COVID-19, post-earthquake reconstruction, transport, justice, innovation, business environment, land administration , science and technology and economic development of the Pannonian region.