Alan Herjavec of the Croatian Development Bank: 80 per cent of approved loans in 2022 are for sustainable development and renewable energy projects

Alan Herjavec of the Croatian Development Bank: 80 per cent of approved loans in 2022 are for sustainable development and renewable energy projects

Of all loans approved in the past year, 80 per cent were for sustainable development, energy efficiency or renewable energy projects. This was said by Alan Herjavec, Member of the Board of the Croatian Bank for Reconstruction and Development, during the second day of the Green Week 2023 forum, dedicated to the green transition in Central and Eastern European countries and energy connectivity, green finance and innovation, which started yesterday in Sofia. It is organised by dir.bg and 3E News, and BTA is a media partner.

“Our bank recently celebrated its 30th anniversary and although the topic of the green economy and digitalisation has been on everyone’s radar for the past few years, we started working in this direction 20 years ago. We were among the first financial institutions on the Croatian market to start financing renewable energy and energy efficiency projects. As we developed these activities, we were also able to attract the support of our partners such as the European Bank for Reconstruction and Development,” explained Alan Herjavec.

He added that in 2020 they adopted a new medium-term strategy for their activities, within which the green transition of the national economy has become a strategic goal for the institution. There are 4 main pillars in the strategy and one of them is aimed at supporting the transition of Croatian companies to a low-carbon economy.

Herjavec pointed out that over the past few years they have developed several new financial instruments and products that have a primary focus on the green and digital transition and target both the private and public sectors.

“The Croatian Development Bank is one of the institutions that has been involved in the development of the National Recovery and Sustainability Plan so that we can ensure strong use of funds for appropriate projects. In cooperation with the line ministries, our bank has developed several financial instruments under the Recovery and Development Fund that will be available for entrepreneurs in the field of green and digital investments and also for research-based projects,” Herjavec added.

He informed that they have developed products for specialized target groups to which they can offer loans of up to EUR 1 million for both public and private institutions. The interest rate on these loans is 0.8, or even 0.4 for some.

For those who do not fall within this range, the bank has set up an interest rate subsidy programme where it can finance up to 75 per cent of the cost of interest payments. This instrument is aimed at small and medium-sized enterprises and public sector organisations. The implementation of this programme started at the beginning of this year. “Considering the global surge in interest rates, these products should provide more favourable project financing conditions for the benefit of private entrepreneurs so that they can develop their businesses in a more eco-friendly direction,” Herjavec explained.

He talked about another of their developments – bank guarantee products for large corporations to mitigate the risk of green transition activities. In addition, to support the new generation of entrepreneurs, the bank is developing a new source of private equity funding, again focused on sustainable companies and projects.

All this is happening together with the European Investment Fund.

“Overall, the green transition and climate change will strongly influence our future economic development in all areas, in terms of physical risks, reporting and reporting requirements, the products and services we have to offer and that will be expected by the end customer,” Herjavec concluded.