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EBRD to boost Croatia’s tourism industry
€24 million to improve standards of Jadranka hotels on Losinj islands
The EBRD is making an equity investment worth €24 million in Jadranka Hotels, which owns and operates a chain of hotels and villas on the Croatian islands of Losinj, in the northern Adriatic.
The investment will be used by Jadranka Hotels to finance the refurbishment and modernisation of its existing hotels and villas, allowing it to improve Croatia’s tourism offering in the northern part of the Adriatic. The EBRD finance will consist of €3.2 million to buy existing shares and those funds will be used to refinance company debt. A further €20.8 million will be invested in newly issued shares.
As Croatia’s tourism industry continues to grow strongly in the coming years, many hotels will need to be further refurbished in order to meet the strong demand for international standards and to provide for quality tourism at affordable prices.
The Bank’s investment will partly be used by Jadranka Hotels to implement a €80.3 million capital expenditure programme phased over the next 5 years. One of the aims is to extend the tourist season by offering “healthy lifestyle” products and services, such as spas and health centres, which could be used throughout the year. In addition, a modernisation programme will be implemented in order to upgrade the standards of the existing hotels and villas to 3-4 stars according to international standards.
Peter Reiniger, EBRD Business Group Director for Central and Eastern Europe, said the EBRD is keen to support local companies such as Jadranka Hotels, to finance their development plans and implement international best practices. By investing in modernisation and product diversification, the Bank is encouraging the growth of the promising tourism industry, which is a key sector for development of the Croatian economy, Mr Reiniger added.
Darin Lekić, CEO of Jadranka Group which owns Jadranka Hotels, emphasized that the agreement with the EBRD confirms the company’s potential and ensures that the company’s development strategy is implemented. What is particularly important in this development process is the expected transfer of know-how which aims to raise the level of employee competence and have a positive effect on the entire region.
The EBRD has invested more than €1.8 billion in Croatia in a total of 83 projects across all sectors of the economy, with a concentration on the financial sector and on infrastructure. In addition, the Bank helped mobilise €5 billion from other sources.
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