Investment Plan gives a boost to Croatia's tourism sector
The European Investment Bank (EIB) signed today a loan of €16 million with Valamar Riviera d.d - Croatia’s leading tourism company. This is the first EIB transaction in Croatia with a private sector company that benefits from the support of the EU budget guarantee under the European Fund for Strategic Investments (EFSI), the financing component of the Investment Plan for Europe.
The EFSI-backed EIB loan will co-finance the completion of the Valamar Girandella Resort in Rabac on the Istrian peninsula with the construction of its first five-star "Kinderhotel", a family-friendly resort focused on children's activities.
With the hotel opening in April this year, the process of repositioning destination Rabac as leading leisure destination for high-end guests will be completed. This loan is complementary to an intermediated loan of €44 million granted to Valamar through Croatia’s public development bank HBOR in March 2017.
Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Applying for financing from the European Investment Bank was a smart move by Valamar. The loan is guaranteed by the European Fund for Strategic Investments so the EIB was able to lend to a smaller-sized business than it traditionally does. As tourism is one of Croatia's key sectors, this project will bring a boost to the economy and sustain local jobs. I can only encourage more businesses in Croatia to contact the EIB and see how EFSI can support their growth plans.”
EIB Vice-President Dario Scannapieco commented: “Today we have presented the results of the EIB Group in Croatia in 2017, which have reached the highest level since 2013. Disbursements, representing our contribution to the real economy, have reached EUR 729m - an increase of 28% compared to 2016. We have also signed the first direct transaction with a private sector company backed by the EFSI guarantee to support tourism in Croatia - one of the most important economic sectors, generating some 20% of Croatia’s GDP and providing 10% of employment in the country. We have also signed an agreement to further improve the quality of EIB advisory services, establishing the European Advisory Hub as the single point of entry in Croatia for support for project preparation.”
Minister of Regional Development and European Funds Gabrijela Žalac stated: “Croatia has recently established and defined a strategic planning system in the Republic of Croatia, therefore defining the investment planning system and its integration into the strategic planning system is a great challenge but also the great need of our country. With this contract, signed with and completely funded by the EIB, Croatia will get all the necessary advisory assistance from the international team of top experts whose primary objective will be to assist Republic of Croatia in identifying strategic investments and to build up better strategic management system”.
Minister of Finance of Croatia Zdravko Marić said: “We are pleased to see the EIB Group activity in Croatia growing both in annual volume and in the variety of products available, well-illustrated through the three agreements signed today. Besides the continuing support to the backbone of the economy through intermediated loans for SMEs and midcaps, we are glad to have the EIB directly supporting private corporates. By utilizing the increased risk taking capacity through the European Fund for Strategic Investments, the EIB can enable additional private investments in various sectors of the economy. The advisory support of the EIB through the European Investment Advisory Hub to Croatia is highly appreciated as well. Combined together with the use of European Structural Investment Funds, the EIB Group contribution is invaluable for growth and employment in the Croatian economy.”
Marko Čižmek, Management Board Member at Valamar Riviera stated: “The agreement we signed today with the European Investment Bank confirms the remarkable trust that large funders have in Valamar Riviera. It is also a good example of an investment project that has been recognized by top EU institutions as it contributes to a broader development of Croatia’s economy. Valamar continually invests to develop its destinations and improve product quality and work conditions in hospitality. For Valamar, this collaboration is of utmost importance as it represents an expansion of funding resources that will help us carry out large investment projects. We hope to continue this collaboration with EIB in future projects as part of our strategic goals that include a sustainable and socially responsible double-digit growth in results and enterprise value."
Background
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. It makes long-term finance available for sound investments in order to contribute towards EU policy goals. The EIB works closely with other EU institutions to implement EU policy.
As the largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but it also supports the EU's external and development policies.
The Investment Plan for Europe, the so-called Juncker Plan, is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise some €264 billion in investments and support up to 590 000 SMEs across all 28 Member States. In December 2017, the European Parliament and Member States reached an agreement to extend the duration of EFSI and increase its financial capacity. The recent EFSI data by sector and by country are available here. For more info, please see the FAQs.
Valamar Riviera is the leading Croatian tourism company operating 30 hotels and resorts and 15 camping resorts (or: 12% of Croatia’s total categorized accommodation) located along the Adriatic coast: in Istria, on the island of Krk and Rab and in Dubrovnik, that can welcome more than 56,000 guests daily. It employs more than 6,600 people in 2018 and the company strategy is focused on investments as key growth drivers. Valamar Riviera invests to improve accommodation and develop talents, destinations and innovative services. It is a large investor in Croatian tourism as evidenced by HRK 4 billion invested in the development and improvement of its portfolio.