The European Bank for Reconstruction and Development (EBRD) is providing a €50 million loan to the City of Zagreb, the capital of Croatia and its largest city, to support its vital public utilities, including water and transport, EBRD writes.
The EBRD’s loan will be on-lent as working capital to two critical infrastructure providers: Zagrebacki Holding (ZGH), the municipal holding entity responsible for water supply and wastewater collection, waste management, management and maintenance of public areas and public roads in the city; and Zagrebacki elektricni tramvaj (ZET), the public transport provider in Zagreb and surrounding towns.
This support will meet the liquidity and working capital needs of these critical infrastructure providers, and compensate for temporary revenue losses due to the Covid-19 crisis and the earthquakes that hit the Zagreb area in 2020, causing an estimated €11 billion in damages.
The EBRD Director for Croatia, Victoria Zinchuk, said: “The Bank is very pleased to sign this agreement with Croatia’s capital and to help its further recovery. The EBRD has extensive experience in working with municipal enterprises, both to finance specific projects and to help them improve financial and organisational management, so we hope to continue this cooperation.”
The Mayor of Zagreb, Tomislav Tomasevic, added: “The city of Zagreb welcomes this much-needed financial support and hopes to develop a comprehensive programme of cooperation with the EBRD. We not only want to develop a greener, cleaner Zagreb, but also aim to reform municipal utilities providers, and count on EBRD support in this.”
In the previous project with Zagreb in 2016, the EBRD invested €5.9 million equivalent in local currency into the bonds issued by ZGH, which were fully guaranteed by the City of Zagreb.
Croatia is a key investment destination for the EBRD, where the Bank has invested €4.2 billion to date.
The EBRD finances projects in infrastructure, energy efficiency and security, agriculture and industry, as well those that support smaller businesses. The investments are combined with support for policies that promote a more enabling business environment.