New loan for heavily indebted Croatian Motorways public company.
The European Bank for Reconstruction and Development (EBRD) and Croatian Motorways (Hrvatske Autoceste, HAC) public company signed an agreement on a 250 million euro loan, which will be used to refinance debt and increase operational efficiency, announced the Bank in a statement, reports Poslovni.hr on March 31, 2016.
The loan, which is being guaranteed by the government, will be disbursed in two tranches. The first tranche worth 200 million euros will be used to refinance part of the HAC debt, but under more favourable conditions and with a longer maturity period. The second tranche worth 50 million euros will be used to finance operational and efficiency improvements, which will also help prepare the company for possible private sector participation, based on a possible strategic decision by the government.
“Through a comprehensive investment programme in the last twenty years, Croatia has invested heavily in its road infrastructure. The EBRD loan will be accompanied by grants intended for technical assistance in developing a plan for improving the company’s operational performance. The resources offered by the EBRD loan partly provide long-term financing of the road sector and enable improvement in the company’s operating efficiency”, said Vedrana Jelušić Kašić, the EBRD director for Croatia and Slovenia.
Chairman of the HAC Board of Directors Davor Mihovilić said that this contract with the EBRD was very important to HAC since it would partly refinance some of the loan obligations and at the same time help implement the corporate restructuring and set up a sound basis for future business operations.
The European Bank for Reconstruction and Development has been actively participating in Croatia as an investor since the independence of the country, having invested to date more than 3.2 billion euros in 183 projects. The Bank’s activities cover all economic sectors, with particular emphasis on infrastructure, corporate, financial and energy sectors.