Croatia: ZABA to issue up to €300 million in new credit with EIB backing

• Zagrebačka Banka has signed a guarantee agreement with the European Investment Bank, enabling up to €300 million in new loans to Croatian Mid-Caps and public entities,
• Through further investments by end clients, the total positive impact on the economy is expected to be up to €420 million over the coming years.
• Some 20% of the available financing will be earmarked for investments in alternative sustainable energy sources and in energy efficiency projects for existing buildings.

The European Investment Bank (EIB) and Zagrebačka Banka d.d. (ZABA) have signed a guarantee agreement that will allow the Croatian Bank to issue up to €300 million in new loans to its clients. The transaction is aimed at Croatian Mid-Caps and public sector entities and will have a partial focus on sustainability. Indeed, 20% of the total value of the portfolio of lending that ZABA will create, is earmarked for investments in alternative sustainable energy sources and in energy efficiency projects for existing commercial and public buildings.

"This is not the EIB's first operation with Zagrebačka Banka, and we are happy to build on their experience in the local market to channel relevant funding to Croatian counterparts." commented EIB Vice-President Teresa Czerwińska. "Previous EIB Group transactions with ZABA are estimated to have made available more than half a billion euros in funding for Croatian SMEs since the beginning of our partnership, and I'm happy that we can renew our partnership to the benefit of Mid-Caps and public sector entities."

"By signing this Agreement, Zagrebačka banka became the first and only Croatian bank in the EIB's Linked Risk Sharing (LRS) program. This cooperation, represents a significant lever for the further growth of the Croatian economy, enabling us to offer even better lending conditions to clients in the segment of mid-cap companies and the public sector. In addition, through this cooperation we actively support sustainable projects, especially those directed towards energy efficiency and renewable energy, which is one of our key strategic determinants," said Ivan Vlaho, CEO of Zagrebačka banka and Deputy Head of UniCredit Group for Central and Eastern Europe.

The EIB will issue a delegated loan-by-loan partial guarantee to ZABA, worth €150 million. Thus, with the applicable guarantee rate of 50%, the Croatian financial intermediary will establish a portfolio of new lending of up to €300 million. Finally, it is estimated that, through the investments made by the final beneficiaries, the operation will have a total impact on the Croatian economy of up to €420 million if the guarantee is fully used.

With respect to sustainable investments, the EIB guarantee will allow ZABA to take more risk on green projects. This is the EIB's first linked risk sharing operation for Mid-Caps transition in Croatia done without European Commission backing, and the second with a Unicredit Group entity. The decisions on all lending requests under this operation remain with Zagrebačka Banka.

Background information

The European Investment Bank (EIB) finances sound investment contributing toward EU policy goals. Over the last five years, the European Investment Bank has financed over €1,6 billion worth of projects in Croatia.

Zagrebačka Banka was formed in 1977 and is today part of Unicredit Group. ZABA was the first Croatian bank to be listed at the Zagreb Stock Exchange in 1995. As the country's largest bank its services are used by 80,000 businesses and over 1 million citizens.

ZABA to issue up to €300 million in new credit with EIB backing
©EIB ZABA to issue up to €300 million in new credit with EIB backing
©EIB ZABA to issue up to €300 million in new credit with EIB backing
©EIB ZABA to issue up to €300 million in new credit with EIB backing
©EIB ZABA to issue up to €300 million in new credit with EIB backing
©EIB