Miga has provided Bank Austria Creditanstalt with a guarantee covering its €65mn shareholder loan to HVB Bank Croatia dd.
The guarantee, for €61.8mn, covers against the risk of transfer restriction for a period of up to 10 years. The project will allow HVB Croatia to further expand its in-country operations, focusing mainly on financing small and medium-size enterprises (SMEs) and on-lending for projects in the energy and food industry sectors, among others. Through its upcoming merger with Splitska Banka, the bank is expected to play an even more important role in the financial sector as the country’s third largest bank.
The project complements the World Bank Group’s country assistance strategy, which is to help Croatia achieve economic growth by improving the environment and incentives for attracting financial flows, particularly private and foreign direct investment. To do so, the bank’s efforts are focused on SMEs, improving access to housing finance, encouraging contractual savings, and promoting infrastructure investments. This follows a number of years of lending for infrastructure and related sector reforms, focused on addressing the country’s post-war reconstruction needs.
The project, supported by Miga, is expected to yield a number of developmental benefits. Miga’s coverage will allow the bank to increase lending, particularly medium-term financing for productive investments, encouraging competitive pricing and better terms for loans. The project will also introduce new products, more efficient services at competitive prices, and know-how and technical improvements. SMEs will receive a critical boost through improved access to financing, as will Croatian export-earning companies. It will continue to support local community activities such as SOS Children’s Village, and other humanitarian efforts, as well as participate in diverse cultural projects in cooperation with Bank Austria.