Under the National Recovery and Resilience Plan (NRRP), HBOR started the implementation of financial instruments that provide extremely favourable loans for investments of private and public sector entities – at interest rates from 0.4 percent or with interest rate subsidies of up to 75 percent.
Direct loans at interest rates as low as 0.4 percent
Direct loans under the NRPP will be available to start-up entrepreneurs (up to 3 years of operations), young entrepreneurs (up to 40 years), companies owned and/or managed by women, entrepreneurs investing in special areas of the Republic of Croatia (assisted areas in accordance with the development index , mountainous areas and islands) and entrepreneurs investing in the commercialisation of research, development and innovation-based projects (RDI projects).
The interest rate for loans to projects that are mostly focused on green or digital transition and commercialisation of RDI projects will be 0.4 percent per annum, while the interest rate for other investments in competitiveness and resilience will be 0.8 percent per annum. Loans will be approved without charging the loan application processing fee and without charging the commitment fee, whereas the repayment period will be up to 15 years, which includes the possibility of a grace period of up to 3 years.
Interest rates under HBOR’s existing programmes up to 75 percent lower
HBOR will enable a significant reduction in interest rates for business entities of all sizes both in the private and public sectors under its existing investment finance programmes: Private Sector Investment, Public Sector Investment and Youth, Female and Start-Up Entrepreneurship.
For investments in green or digital transition projects, the interest rate charged to the borrowers can be reduced by up to 75 percent; for investments in special areas of the Republic of Croatia, including public sector investments in earthquake recovery, and investments in RDI projects by up to 65 percent; whereas for other investments that increase competitiveness and resilience by up to 50 percent.
In other words, interest rate for a beneficiary of HBOR’s direct loan investing in a green transition project of its manufacturing company under the Private Sector Investment project would be, for example, 0.375 percent instead of the current 1.5 percent. This interest rate can be further reduced depending on the area of investment (thanks to subsidies from individual LRGUs) and if the company employs a young person under 30.
When a loan is approved by a commercial bank or a leasing company, the interest rate determined for an individual project is reduced in the same manner, thus providing entrepreneurs with a significant reduction in interest rates. Loans from commercial banks and placements of leasing companies with a subsidy from the NRRP funds will be available after conclusion of an appropriate agreement between HBOR and commercial banks, i.e. leasing companies. Until then, interested entities can apply for a loan directly in HBOR.
Do No Significant Harm Principle
The total value of financial instruments, the implementation of which was started by HBOR, amounts to HRK 1.1 billion. The goal of the financial instruments that HBOR will implement is to encourage the strengthening of investment activity, but also to enable a successful transition to green and digital technologies as the basis for the future sustainability and competitiveness of the Croatian economy.
Any project that uses the NRRP funds must meet the Do No Significant Harm principle in terms of excluding ineligible activities, sustainability testing and comply with relevant EU legislation. More details and the questionnaire that must be filled out when applying for a loan can be found on the HBOR website attached with the loan programmes.