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Croatia's tourism sector gets DM 50 million from EBRD
As holiday-makers contemplate a return to once popular destinations on the Adriatic coast, the European Bank for Reconstruction and Development (EBRD) is providing a DM 50 million credit line to help Croatia's tourism industry finance urgent upgrading and reconstruction work. The credit line will be administered by Hrvatska Banka za Obnovu i Razvitak (HBOR), the Croatian Bank for Reconstruction and Development.
"Tourism is one of Croatia's main hard currency generators and a crucial source of employment", said David Hexter, Deputy Vice President of the EBRD. "Working with HBOR allows the EBRD to strengthen existing banking services and allows for a transfer of knowledge in assessing tourism sector projects." The Director of the EBRD's Property and Tourism team, Marc Mogull, added: "Although direct war damage to Croatia's tourism infrastructure was limited, the use of hotels to house refugees has left these facilities in desperate need of repair. With interest in the country growing among foreign tourists and tour operators, local owners need to deliver an internationally competitive product."
Bozo Prka, the Croatian Minister of Finance commented: "We are making today a first step towards a sustainable long-term development of Croatia's tourism. With that in mind we are looking toward the private sector to lead the way forward."
To be eligible for funds, borrowers will need to be private companies operating tourist facilities with commercially worthwhile and profitable projects. Loans, with maturities of up to six years, will be extended to cover reconstruction costs such as redecoration and repair of hotel and other lodging facilities, upgrading of marinas and structural improvements to camp sites. Greenfield projects are not being considered for this credit line.
HBOR is the only state-owned investment bank in Croatia. It operates in priority sectors identified by the government and coordinates and administers foreign loans approved and guaranteed by the Republic of Croatia. HBOR has an existing share capital of DM 400 million and an additional DM 600 million approved and due to be paid in by the end of 2001.
Prior to 1990, Croatia's tourism industry was one of the most important sectors of the economy. Between 1985 and 1990 tourism accounted for 6 per cent of Croatia's gross national product and employed, directly or indirectly, close to 200,000 people.
To date the EBRD has committed ECU 199 million in projects to Croatia and this is its first loan to the tourism sector.
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