HBOR FAQ - Lending under NRRP

Lending under the National Recovery and Resilience Plan (NRRP)

1. Which investments are eligible for financing under the NRRP?
Eligible investments are described in individual loan programmes and corresponding operational programmes, and more favourable / better loan terms and conditions can be realised if the project meets the criteria of green and / or digital transition, or in the case of investments in special areas of the Republic of Croatia, investments in Research, Development and Innovation or other investments in competitiveness and resilience. All investments must meet at least the following criteria:
  • They are implemented in accordance with the relevant environmental legislation at EU and national levels
  • They are not included into the list of ineligible activities
  • They meet the Do No Significant Harm (DNSH) principle in accordance with the sustainability proofing in the context of the InvestEU fund.
In addition, the projects must be in line with HBOR's General Eligibility Criteria. Furthermore, for the project to meet the green transition criteria, it must significantly contribute to one or more environmental objectives.

2. Where can the list of ineligible activities be found?
The list of ineligible activities can be found in the relevant Operational Programme. Operational programmes can be accessed at HBOR's websites via a link from every loan programme through which FIs are implemented under the NRRP. Operational programmes do not exclude the application of the General Eligibility Criteria, which are an integral part of regular loan programmes in parts that are not prescribed by the operational programmes.

3. To what does the DNSH principle relate?
The DNSH principle implies that a certain activity / project must not do significant harm to any of the following 6 environmental objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, protection and restoration of biodiversity and ecosystems

4. What is considered an investment in green transition?
Projects that, according to the EU taxonomy criteria and accompanying regulations (delegated acts), contribute significantly to the achievement of at least one of the six environmental objectives (see answer to question 3. above) and that at the same time satisfy the Do No Significant Harm (DNSH) principle, i.e. do no harm to other environmental objectives. Green transition projects include, among others, investments such as green technologies, business models based on the circular economy, renewable energy sources, energy efficiency, etc.

5. How does HBOR verify the compliance of a project with the DNSH principle?
A DNSH analysis is conducted, which, on the basis of the submitted Self-Assessment Questionnaire and other legal, technical and project documentation (preliminary design, main design and final design, investment study, environmental report, environmental impact assessment and other relevant documents defined by the relevant national and EU legislation), determines whether the project / investment is in compliance with the DNSH principle.

6. Can the Self-Assessment Questionnaire be submitted before submitting the loan application in order to establish whether the project meets the NRRP criteria?
No, it is necessary to submit the entire supporting documentation for the processing of a loan application in order to be able to consider all aspects of the planned investment also in terms of the General Eligibility Criteria, which are an integral part of regular loan programmes. Documentation is submitted exclusively by post or in person to the address: HRVATSKA BANKA ZA OBNOVU I RAZVITAK, ZELINSKA 3, 10 000 ZAGREB.

7. Can an application for financing under the NRRP be submitted through a commercial bank?
Yes, applications for financing at interest rates subsidised from the NRRP funds can be submitted through commercial banks that have joined the implementation by signing the Agreement with HBOR. The commercial banks in question are listed in the document called: List of Documentation and Commercial Banks, which is a constituent part of every loan programme and is publicly disclosed with every loan programme at HBOR’s websites.

8. Who are eligible borrowers?
  • Micro, small and medium-sized private sector entities - companies, crafts businesses, sole traders, family farms in the VAT system, cooperatives and institutions as follows:
    • Interest rate subsidy under the programmes: Youth, Female and Start-Up Entrepreneurship, and Private Sector Investment,
    • Under the programme: Special SME Segments Investment under the NRRP, if they meet at least one of the following conditions: start-up entrepreneurs, young entrepreneurs, female entrepreneurs, entrepreneurs investing in special areas of the Republic of Croatia (supported areas, hill or mountain areas, the islands), entrepreneurs investing in the commercialisation of projects that are based on research, development and innovation (RDI)
  • Mid Caps - interest rate subsidy under the programmes: Private Sector Investment, and Youth, Female and Start-Up Entrepreneurship
  • Large business entities - interest rate subsidy under the programmes: Private Sector Investment, and Youth, Female and Start-Up Entrepreneurship
  • Public sector entities - interest rate subsidy under the programme: Public Sector Investment
Ineligible borrowers are the entities that belong to the category of companies in difficulties in accordance with the provisions of Article 2, paragraph 18 of the Commission Regulation (EU) No. 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26 June 2014, hereinafter: the Regulation: 651/2014), i.e. in accordance with the provisions of the regulation in force at the moment of loan approval. For more details, see:

9. Is VAT an eligible expense?
No, VAT is not an eligible expense.

10. Is refunding of existing loans eligible?
No, refunding of existing loans is not an eligible expense.

11. Is investing in holiday homes eligible under the NRRP?
In accordance with the General Eligibility Criteria, investing in holiday homes, apartments and rooms for rent is eligible in the following cases:
  • In the areas of special state concern or supported areas - LGUs classified into groups I, II, III or IV or hill or mountain areas or the first category islands;
  • In the case of traditional buildings (individual buildings that are protected as cultural heritage, buildings that are located in settlement zones that are protected as cultural heritage or that are located in contact zones of protected zones, and all other individual buildings that are constructed/reconstructed in accordance with special conservator conditions in terms of traditional construction, where the term conservator means the Conservation Department of the Ministry of Culture or another public administration body responsible for the protection of cultural heritage);
  • In the case of investing in tourist apartments, pursuant to the Ordinance on classification, categorisation and special standards for catering facilities in the group Hotels.
In addition, investing must not harm any of the six environmental objectives, i.e. it must satisfy the DNSH principle.

12. Is investing in hybrid vehicles eligible?
Hybrid vehicles are not eligible due to restrictions relating to all fossil fuels.

13. Is investing in the procurement of wood stoves / biomass boilers eligible?
Investments that envisage the use of solid fuels that are not of fossil origin are not on the list of excluded investments, but they must comply with relevant environmental legislation at EU and national levels.

 14. Is investing in the purchase of and equipment for business premises eligible?
An investment is eligible if it is in compliance with the General Eligibility Criteria and if it satisfies the DNSH principle.

15. Until when can an application for financing through financial instruments under the NRRP be submitted?
NRRP financial instruments are implemented until the available funds have been exhausted, however until 30 June 2026 at the latest.

16. How can a project meet the „green transition“ criteria and achieve more favourable terms and conditions of financing?
The project preparation in accordance with the DNSH principle is a basic mechanism for confirmation that the respective project or the activity does not have significant negative impacts on climate and environmental goals of the EU Green Deal.  In order for the project to be able to achieve more favourable financing conditions (higher rate of interest subsidy), it must be evaluated as a "green" transition project, that is, meet the conditions for evaluating a significant contribution to the achievement of climate and environmental goals of the EU Green Deal. The assessment is made by analysis after the submitted self-assessment questionnaire and other necessary documentation.

An example of significant contribution: In case of construction of a new business facility that wants to be classified as a “green” facility, it is necessary to ensure through technical and construction measures that the new facility has a primary energy consumption 20% lower than  the current national standard (Nearly Zero Energy Building standard), which significantly contributes to at least one environmental goal (mitigating climate change), and it is necessary to meet the DNSH principle in the remaining 5 environmental goals.

17. How does HBOR implement the analysis of compliance of investment projects with the DNSH principle?

HBOR is obliged to verify the compliance of investments with the DNSH principle with respect to the financial institution included in the implementation of measures in such manner that:

1. non-eligible activities stated in the Operational programmes under the NRRP that are enclosed to the loan programmes are excluded from financing.
2. for each project, an analysis of compliance with the relevant environmental legislation at the EU and the national levels is carried out.
3. In the implementation of the NRRP measures, ensure the application of the Technical Guidelines for sustainability proofing of the European Commission within the framework of the InvestEU fund ((2021/C 280/01)).

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