Loan (Public sector investment)

By-laws of HBOR
Decision on General Terms and Conditions of HBOR Lending Activities
HBOR Act

The ‘Public sector investment’ is one of the lending instruments of the Croatian Bank for Reconstruction and Development (HBOR, Hrvatska banka za obnovu i razvitak).
Purposes of the loan are:
a) capital investments of public sector business entities aiming to encourage projects of environmental protection, energy efficiency, and renewable energy resources as well as development of social and business infrastructure in general;
b) capital investments of public sector business entities for the purpose of recovery from the consequences of earthquake and for stimulating the economic development of the affected counties;
c) company working capital up to 30% of the contracted loan amount; and
d) Natural Capital Financing Facility (NCFF) finance projects that contribute to the conservation and sustainable use of natural capital, as well as adaptation to climate change by using natural-based solutions. These projects include green infrastructure projects, green entrepreneurship, payment for ecosystem services and biodiversity offsets and compensation.
The loan serves public sector business entities - units of local or regional government (municipalities, cities and counties) and companies, institutions and agencies owned or majority-owned by the units of local or regional government and/or the Republic of Croatia.
Implementation of the loan is available directly through HBOR, or through commercial banks which are in cooperation with HBOR, or through a risk-sharing model of HBOR and commercial banks. Available choices for the manner of implementation depend on the type of the project. For example, NCFF projects financing is available only through HBOR.
Applications are accepted from 9th February 2021 onwards.

Generally, the minimum amount of the loan is 300,000.00 HRK (ca.40,000.00 EUR). The maximum amount is not limited and depends upon the specific features and creditworthiness of the borrower, purpose and structure of investment as well as available HBOR’s sources of finance. Financing through loan can be up to 100% of the estimated investment value (it is also possible to finance the corresponding VAT).
The interest rate is from 1.00% to 2.00%, depending on the type of business entity and the location of the investment. This can be further reduced for loans from NCFF natural capital financing facility credit line. However, in certain cases, the interest rate can be higher. All particularities are further explained in the open call.
Generally, there is a loan application fee. There is no application fee for loans intended for the recovery from the consequences of earthquake and for the economic development of affected counties. An early repayment fee applies.
The repayment period is up to 15 years, with up to a 5-year grace period, depending on the purpose and structure of the investment. For investments in tourism or if the investment study indicates the need for longer maturity (grace period), the repayment period can be extended to 17 years, including a grace period of up to 4 years. Generally, the repayment can be done in equal monthly, three-monthly or semi-annual instalments.

Public sector business entities - units of local or regional government (municipalities, cities and counties) and companies, institutions and agencies owned or majority-owned by the units of local or regional government and/or the Republic of Croatia.
For a loan with the purpose of recovery from the consequences of earthquake and for stimulating the economic development of Sisak-Moslavina, Zagreb or Karlovac counties - public sector business entities that operate or will operate in Sisak-Moslavina, Zagreb or Karlovac counties.

The call has been constantly open since 8th March 2021, so any addressee can apply at any time after the publication of the call. There is currently no foreseen deadline.
Necessary documentation depends on the manner of implementation, the loan programme and type of investment, type and size of the client as well as the purpose and amount of requested loan. If the loan is for the purpose of a RES installation, the investor handles the necessary bureaucracy and procedures for installation of the RES itself with the distribution system operator (currently only HEP ODS d.o.o.) and other necessary entities.
Generally, the loan procedure includes an Investment announcement form, a Loan application, Client’s Tables (data on the investment), Statement on related entities, Statement on aid, Questionnaires for natural persons, Questionnaire for politically exposed persons, Questionnaire for legal entities, Environmental protection questionnaire, Statement on the Use of Real Estate, and other possible documentation requested by HBOR.
The outline of the procedure is available on the webpage of the loan on the HBOR website, but only for the Croatian version. However, a general list of documentation for several loans is available in the document titled ‘List of Documentation and Commercial Banks’ (Popis dokumentacije i poslovnih banaka) on the English version of the webpage. Direct contacts are available for help with the procedure.

Hrvatska banka za obnovu i razvitak (HBOR)