EBRD To Finance Croatian Agriculture, Tourism
Zagreb, August 18, 2004 - The European Bank for Reconstruction and Development (EBRD) said it would lend 71.4 million euro ($88 million) to Croatia's agribusiness jointly with local commercial bank Zagrebacka Banka (ZABA).
Under a separate loan deal, the EBRD would provide a further 10 million euro credit line to Croatian banking group Nova Banka, which is to be on-lent to small and medium companies operating in the tourism sector and related industries.
"A joint risk-sharing facility worth up to 71.4 million euro - of which the EBRD portion is 25 million euro - will make loans available for the 2004/2005 crop season," the EBRD said in a statement.
Croatia's farming sector was badly hit by draught last year and fresh lending is much needed, according to the EBRD.
The facility, now in its third year, is based on the concept of warehouse-receipt financing. The EBRD is working with the Government of Croatia on a warehouse receipt law, which will simplify the procedures for owners of farm commodities to use them as collateral for loans, and thus gain access to working capital.
The EBRD and ZABA, the biggest Croatian bank in terms of assets, which is owned by the Italian bank UniCredito Italiano and the German insurance company Allianz, have been working together since 1995.
The 10 million euro tourism loan will be extended for a period of eight years. The project aims to support development of the tourism industry in the country by improving access to long-term lending for small and medium companies in the tourist industry.