HBOR launches new program for defence and security investments
The Croatian Bank for Reconstruction and Development (HBOR) has launched new lending programmes aimed at encouraging development investments by the Croatian economy and public sector, among which the Investments for Defence and Security programme particularly stands out. The programme is intended to finance strategic projects that strengthen security resilience, technological capacities and the competitiveness of business entities involved in the defence and security sector.
Financing strategic investments in defence and security
The programme is implemented through direct lending by HBOR, which enables more favourable financing conditions for beneficiaries. Investments in fixed assets, i.e. tangible and intangible assets necessary for the implementation of strategic defence and security investments, may be financed in accordance with the General Eligibility Criteria. This includes, for example, the construction of protective facilities and civil protection infrastructure, the construction and modernisation of dual-use infrastructure, investments in cyber security, company modernisation, and research, development and innovation in the military and security industry, including software, mechanical, electrical, electronic and aerospace technologies. Working capital may also be financed through the loan, up to a maximum of 30% of the contracted loan amount, if necessary for the implementation of strategic defence and security investments and for the liquidity of entities in the defence and security sector. Investments must comply with relevant European Union legislation and applicable national environmental protection regulations, as well as the “Do No Significant Harm” (DNSH) principle, as set out in the Technical Guidance on sustainability proofing for the InvestEU Fund.
Who can use the programme?
The programme is open to private-sector business entities of all sizes and legal forms that perform economic activities and are registered with their headquarters in the Republic of Croatia. Beneficiaries may also include public-sector entities that perform economic or commercial activities.
What can be financed?
Eligible investments include fixed assets necessary for the implementation of strategic defence and security investments, including the construction of protective facilities and civil protection infrastructure, the modernisation of dual-use infrastructure, investments in cyber security, company modernisation, and research, development and innovation in the military and security industry. Particular emphasis is placed on software, mechanical, electrical, electronic and aerospace technologies.
Financing terms
Loans are approved in euros, and the minimum amount of an individual loan is generally EUR 100,000. The maximum amount is not predetermined, but depends on the beneficiary’s creditworthiness, the purpose and structure of the investment, and HBOR’s available financing sources. The repayment period may be up to 20 years, including a grace period of up to three years, or longer if justified by the needs of the project.
More favourable interest rates and subsidies
For private-sector business entities, the fixed interest rate is 2.0% per year for loans up to and including EUR 400,000. For loans above this amount, the interest rate is determined by HBOR, with the possibility of subsidisation, whereby the subsidised interest rate for the beneficiary may be at least 1.5% per year. For public-sector entities, a fixed interest rate of 1.5% per year is envisaged. Loan application processing is carried out free of charge.
Why is the programme important?
The Investments for Defence and Security programme is an important instrument for strengthening the domestic defence industry, security infrastructure and technological development. Through favourable long-term financing sources, entrepreneurs and the public sector are enabled to launch more capital-intensive projects that contribute to the resilience of the economy, the development of innovation and the inclusion of Croatian companies in more demanding defence and security value chains.
HBOR website: Ulaganja za obranu i sigurnost | HBOR