Zagreb, 17 September 2019 – Marija Vučković, Minister of Agriculture, attended the ceremony of signing financing agreements between Hrvatska banka za obnovu i razvitak (HBOR) and commercial banks (OTP banka Hrvatska d.d.; Privredna banka Zagreb d.d.; Zagrebačka banka d.d.) marking the start of the implementation of Investment Loans for Rural Development, for which an amount exceeding HRK 500 million has been provided.


Under the implementation of the Investment Loans for Rural Development financial instrument, HBOR assumes the role of the fund of funds, whereas commercial banks assume that of financial intermediaries who will be receiving and processing loan applications and disbursing loan funds to final beneficiaries.


Loans at low interest rates with long repayment periods and no fees charged

“Today’s signing of the financing agreements between HBOR and commercial banks marks the start of the implementation of the latest financial instrument in a series of financial instruments designed by the Ministry of Agriculture for the purpose of providing financial support to entrepreneurs in the agricultural, processing and forestry industries. All the data collected indicated that these three significant industries were disadvantaged in terms of borrowing through commercial bank lines, which made their market competitiveness questionable. Investment loans for rural development can be used for the financing of projects worth up to EUR 1 million, with long repayment periods of up to 15 years and grace periods of up to 3 years, or up to 5 years for perennial crops, depending on the needs of each project. Interest rates are low, and no usual banking fees are charged to beneficiaries. I believe this financial product will be an important instrument of support for major investments in the production, processing and forestry industries. It should be further emphasized that the future implementation of these loans will be characterized by a partnership approach, because the banks that signed the agreements today have decided to invest their own (private) funds in addition to the public funds allocated to HBOR under the Rural Development Programme for the implementation of investment loans, which makes the total envelope even more generous,” stated Marija Vučković, Minister of Agriculture, and pointed out:Speaking from the experience of the implementation of the financial instruments launched earlier under the Rural Development Programme, that aroused significant interest among possible beneficiaries, I believe that the financial instrument launched today will continue the success story of reconstructing and developing Croatian agricultural, processing and forestry industries.”


So far, HBOR has approved almost HRK 700 million through financial instruments

“The agreements signed today will enable favourable loan terms and conditions for investing in rural development necessary to create new and better jobs, increase income and strengthen overall competitiveness of rural areas. This is the fifth financial instrument in which HBOR participates and the third intended for the private sector, whereas the other two are intended for the public sector. In the year and a half, during the period of which we have been implementing financial instruments, an amount of almost HRK 700 million has been approved for investments in the private and public sectors, which makes us one of the more successful development banks in this field in the European Union. Considering low interest rates and long repayment periods, I believe that potential beneficiaries will recognise the benefits of this financial instrument, whose objective is to enable new investment and promote the development of rural areas. Therefore, we encourage them to contact the commercial banks included in this cooperation,“ said Tamara Perko, President of the Management Board of HBOR.


Investment at favourable terms in long-term tangible and intangible assets

We would like to stress that last year, as the first step in the implementation of the Investment Loans for Rural Development financial instrument, a Financing Agreement was executed by the Ministry of Agriculture, HBOR and the Paying Agency for Agriculture, Fisheries and Rural Development for the implementation of a financial instrument that enables simpler, faster and easier investing in agricultural, processing and forestry industries at more favourable terms and conditions.


After having successfully placed micro and small loans and individual guarantees (implemented by HAMAG-BICRO), in the first months of implementation, altogether 359 loans were committed and 3 guarantees were issued in the amount of HRK 119.6 million. At the moment, we are completing the initial plan of long-term loans of more than HRK 7 million per project for investing in long-term tangible and intangible assets and working capital.


Investment loans for rural development can be used to restructure, modernise and increase the competitiveness of farms, to dispose of, handle and use the manure for the purpose of reducing a detrimental impact on the environment, to use renewable energy resources, increase value added to agricultural products, develop non-agricultural activities in rural areas and modernise technologies, machines, tools and equipment for wood harvesting and forestry cultivation as well as for pre-industrial wood processing.