Croatian bank PBZ gets €169 million in EIB Group support to enhance financing for companies

• EIB Group provides up to €169 million in support PBZ to expand financing for SME’s and Mid-Caps
• Two-part package includes an EIB guarantee line of up to €100 million for    Mid-Caps and an EIF extension of up to €69 million in guarantees mainly for SMEs
•  Financing to help Croatian businesses accelerate green transition, meet liquidity needs and bolster competitiveness

The European Investment Bank (EIB) Group is providing Croatian lender Privredna Banka Zagreb (PBZ), part of the Intesa Sanpaolo Group, support of as much as €169 million to expand financing for a range of companies in the country, seeking to bolster business sustainability and competitiveness.

Under one component of the agreement, the EIB is offering PBZ a guarantee line of up to €100 million for the benefit of Croatian large companies and Mid-Caps. Under a second element, the European Investment Fund (EIF) is extending guarantees of as much as €69 million for small and medium-sized enterprises (SMEs) as well as small Mid-Caps in Croatia. The financing will be used in part to advance climate action and will feature instruments such as corporate bonds issued by Mid-Caps being used for the first time in Croatia.

“We are supporting PBZ in a pioneering financial project for Croatia, deepening the capital market in the process,” said EIB Vice-President Teresa Czerwińska. "This will help channel significant funding to Croatian companies and, by extension, strengthen their balance sheets and their green credentials."

PBZ will leverage EIF support, backed by the InvestEU programme, to provide funding on favourable terms for Croatian SMEs and small Mid-Caps over the next two years. This financing is designed to help businesses to go green, meet liquidity needs, and strengthen their competitiveness.

The EIB support involves a delegated loan-by-loan guarantee with a 50% risk-sharing rate. This will enable PBZ to expand its lending capacity, generating more than €200 million in new financing to Croatian large companies and Mid-Caps. Also, with its guarantee, the EIB aims to promote Mid-Caps’ access to finance particularly through mini-bonds – a debt instrument previously unavailable in Croatia.

Dinko Lucić, President of the Management Board of PBZ, said: “We are pleased to announce these new guarantee programs in collaboration with the EIB and EIF, offering support to our clients across large corporates, mid-caps, and SMEs. We particularly want to highlight the recent launch of an innovative financing instrument - minibonds - which provide our clients with faster and more flexible access to capital. This partnership fosters growth and strengthens our clients’ competitiveness, providing them essential support to realize their investment plans.”

By fostering access to more sophisticated debt instruments, the EIB and PBZ are contributing to the European Capital Markets Union by supporting their development in emerging economies such as Croatia.

Background information

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The European Investment Fund (EIF) is part of the European Investment Bank Group. It supports Europe’s SMEs by improving their access to finance through a wide range of selected financial intermediaries, such as banks, guarantee and leasing companies, micro-credit providers and private equity funds. The EIF designs and offers equity and debt financing instruments fostering EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions, and employment.

Privredna Banka Zagreb (PBZ) is part of the Intesa Sanpaolo Group, one of the largest banking groups in Europe. PBZ is the second-largest bank and financial group in Croatia by assets, with a market share of around 20 per cent in various operating segments, continuously developing innovative products and services for retail, corporate and SME clients.  PBZ is also a center of excellence for many areas of banking within the International Banks Division of Intesa Sanpaolo. It, therefore, became a regional banking hub following the acquisition of the majority stakes of Intesa Sanpaolo banks in Bosnia and Herzegovina and Slovenia.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery and growth. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. InvestEU brings together under one roof the multitude of EU financial instruments, making funding for investment projects in Europe simpler, more efficient and more flexible. The InvestEU Fund is implemented through financial partners that will invest in projects using EU budget guarantee of €26.2 billion. That guarantee will back investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.