The FINANCIAL — The European Bank for Reconstruction and Development (EBRD) is providing Erste & Steiermaerkische Bank d.d. (Erste Bank Croatia) with funds to increase its support to micro, small and medium-sized enterprises (MSMEs) and to promote energy efficiency investments in the residential sector.
A €20 million credit line will be extended to enable Erste Bank Croatia to increase financing of small businesses which are important contributors to the country’s economic performance and a major employer. Despite their key role for the economy, access to finance remains challenging.
In addition, a €10 million loan will finance sub-loans to borrowers under the Croatia Residential Sustainable Energy Financing Facility (CroSEFF). The €60 million framework supports investments to address the high energy intensity of the residential sector in the country. Erste Bank Croatia will become the first local bank to join the CroSEFF framework, according to EBRD.
Vedrana Jelušić Kašić, EBRD Director for Croatia, said: “We welcome these two loan agreements as they address major issues facing Croatia. The country needs a flourishing private sector, which mostly consists of small businesses. And it needs improvements in the way it deals with energy. A more efficient approach will lead to substantial savings and also alleviate the burden on the environment.”
“SMEs as the driver of economic growth are one of the key segments of our business strategy. This is also reflected in the fact that we are the bank that provides them with the biggest support in the Croatian market, in relative terms. Additionally, it is a fact that there is a considerable potential for funding energy efficiency projects, particularly in the residential sector. We are thus extremely pleased to be the first bank in Croatia to join the CroSEFF programme,” said Chairman of the Management Board at Erste Bank Croatia, Christoph Schoefboeck.
Erste Bank Croatia is the country’s third largest bank with a market share of 15 per cent. The bank is a long-standing partner of the EBRD with three successful projects over the past three years. A credit line for MSMEs was signed in 2012, a credit line under the Western Balkans Sustainable Energy Finance Framework (WeBSEFF) followed in 2014, and most recently Erste Bank Croatia joined the EBRD Trade Facilitation Programme in May 2015.
The EBRD has been active in Croatia as an investor since the country’s independence and has invested some €3.22 billion in 178 projects to date. The Bank’s activities cover all areas of the economy but are especially strong in the infrastructure, corporate, financial institutions and energy sectors.