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Factsheet for measure HR-2019-22/2849 Updated – measures in Croatia

Favorable loans for green and digital jobs

Povoljni krediti za zelene i digitalne poslove

Country Croatia , applies nationwide
Time period Temporary, 01 June 2019 – 30 June 2026
Context Green Transition, Digital Transformation, European Semester
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Predrag Bejakovic (IJF)
Measure added 12 September 2022 (updated 26 April 2024)

Background information

Very often entrepreneurs complain on the unfavorable loan and high interest rates. Under the National Recovery and Resilience Plan (NRRP), Croatian Bank for Recovery and Development (Hrvatska banka za obnovu i razvoj – HBOR) started the implementation of financial instruments that provide extremely favorable loans for investments of private and public sector entities. 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).

Content of measure

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. 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 programs: 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%; 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%, whereas for other investments that increase competitiveness and resilience by up to 50%.

The 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% instead of the current 1.5%. This interest rate can be further reduced depending on the area of investment (thanks to subsidies from individual Local and Regional Government Units) 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.

Updates

The following updates to this measure have been made after it came into effect.

01 March 2024

The Ministry of Tourism and Sports has announced a call for grants to increase the competitiveness of the tourism economy through a green and digital transition in tourism. The total amount of funds for this activity is EUR 3,404,340, and the deadline for submitting project proposals is 15 March 2024. The program should contribute to the development of sustainable tourism products, improvement of processes in the catering business acceptable to the environment, digitization and improvement of the provision of catering and/or tourism services, development of innovative tourism products and services, circular economy and increase in energy efficiency. This means that eligible are subjects of small businesses, i.e. trading companies outside the public sector, trades and cooperatives as well as family farms or agricultural holdings, which are registered or will be registered for catering activities after the completion of the project activities. The grant awarding program is made up of five measures. Measure A, with a total value of EUR 1,000,000, supports investments in energy-efficient tangible assets and green transition, as well as digitization and improvement of work processes of existing hotels. The lowest amount of funds that can be allocated for this purpose is EUR 10,000, and the highest amount is EUR 35,000. The investment, among other things, can be in the replacement of energy- and process-inefficient professional catering equipment with efficient ones for the purpose of improving the technological process of food and beverage preparation and providing other services in hotels. Measure B refers to existing and new camps in the NUTS 2 region: Pannonia or Northern Croatia, whereby investments in energy-efficient material assets and green transition, as well as digitization and improvement of work processes are supported. The lowest amount of funds that can be allocated for measure B is EUR 6,000, while the highest amount is EUR 25,000. The total amount of funds determined for this purpose is EUR 800,000. Measure C refers to investments in energy-efficient tangible assets and green transition, as well as digitization and improvement of work processes of existing catering establishments with year-round operations and include a restaurant, inn, bistro or pastry shop. The lowest amount of funds that can be allocated is EUR 5,000, and the highest is EUR 15,000. The total allocation for this measure is worth EUR 700,000. Investments, in addition to those mentioned under measures A and B, can also be in the acquisition of new equipment related to environmental protection and the circular economy. For measure D, a total of EUR 404,340 is earmarked for investments by family and agricultural farms, farmers in new wineries or tasting rooms, as well as digitization and e-bottling for family farms. The lowest amount of funds that can be allocated is EUR 5,000, and the highest amount is EUR 15,000. Measure E, with a total value of EUR 500,000, refers to investments in existing vessels for excursions and renting with or without a crew and providing accommodation services for guests on the vessel. The lowest allocated amount can be EUR 5,000, and the highest amount is EUR 15,000. Among other things, investments can be in the replacement of gasoline auxiliary engines with electric engines, as well as the replacement of existing marine batteries with new models that will be more environmentally friendly.

26 February 2024

The Ministry of Economy and Sustainable Development has announced a call for submission of project proposals 'Vouchers for Digitization' in order to encourage investments by micro, small and medium-sized enterprises aimed at the implementation of digitization and digital transformation of business. This business transformation is carried out through training and services to improve digital skills, including those related to cloud technologies, digital transformation strategies, digital marketing, increasing cyber resilience through system security checks and the application of complex digital solutions. The goal of this Call is to contribute to increasing the level of digital maturity of SMEs through the development of digital business models, strengthening the capacity to implement digitization and digital transformation or improving cyber security, which will ultimately increase the competitiveness and resilience of companies using digital technologies. Project proposals are submitted in the period from 1 to 29 March 2024 year, and the total available amount of funds is EUR 9,954,210.00 euros. Since EUR 6,636,140.00 have already been distributed in the previous deadlines, the remaining EUR 3,318,070 will be allocated in the said deadline, whereby the intensity of support for the applicant's activities is 60 percent. The maximum amount of grant that can be awarded to an individual project depends on the type of voucher. In the award process, the applicant can have only one project proposal at the same time, which requests the award of vouchers for services provided exclusively by one service provider, and which include one or more activities acceptable for the requested type of voucher. One applicant within this Call may use a maximum of two (2) vouchers, provided that they are different types of vouchers, whereby the total amount of support awarded to the entrepreneur must be in accordance with the rules on small value support. The purpose of this Call is to contribute to increasing the level of digital maturity of SMEs through the development of digital business models, strengthening the capacity to implement digitization and digital transformation or improving cyber security, which will ultimately increase the competitiveness and resilience of companies using digital technologies. Acceptable activities of the applicant are the creation of company websites, landing pages, mobile applications, web applications and websites for e-commerce and management of social networks.

Use of measure

Unknown.

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
European Funds
National funds
National Recovery and Resilience Facility

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement as case not in social partner domain No involvement as case not in social partner domain
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

Due to the nature of the measure, social partners were not involved.

Views and reactions

Although social partners were not involved, the representatives of the Croatian Employers' Association fully support any kind of aid in achieving better financial possibilities.

Sources

  • 27 May 2022: Povoljniji krediti za zelene i digitalne poslove (Favorable loans for green and digital jobs)
  • 27 May 2022: Operativni program za izravne kredite (Operative Program for Direct Loans) (www.hbor.hr)
  • 26 February 2024: Vouchers for Digitization (Vauceri za digitalizaciju) (logickamatrica.eu)
  • 01 March 2024: Improvement of competitiveness in tourism through the green and digital transition (Podizanje konkurentnosti u turizmu kroz zelenu i digitalnu tranziciju) (logickamatrica.eu)

Citation

Eurofound (2022), Favorable loans for green and digital jobs, measure HR-2019-22/2849 (measures in Croatia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HR-2019-22_2849.html

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