EBRD Approves €25 Million Loan To PBZ-Leasing Croatia For MSME And Green Economy Projects

The European Bank for Reconstruction and Development (EBRD) has approved a senior loan of up to €25 million to PBZ-Leasing Croatia (PBZL) aimed at bolstering the local micro, small, and medium-sized enterprise (MSME) sector. This initiative falls under the Financial Intermediaries Framework (FIF) and aligns with the Bank’s commitment to foster competitive and resilient financial systems.

The approved loan is part of the EBRD’s Financial Intermediaries Framework, which seeks to increase the availability of financing for MSMEs and promote sustainable financing practices. At least 30% of the facility will be allocated to projects eligible under the Bank’s Green Economy Transition (GET) approach, using the Green Technology Selector for Croatia.

The primary objective of the loan is to facilitate leases for MSMEs in Croatia, providing much-needed financial support to foster growth and competitiveness in this sector. Additionally, the loan will contribute to environmental sustainability by financing projects that qualify under the GET approach, thereby supporting the transition to a greener economy.

The initiative is expected to enhance MSME competitiveness and encourage sustainable financing practices, ultimately supporting the resilience of the financial system.

PBZ-Leasing d.o.o. (PBZL) is Croatia’s seventh-largest universal leasing company, with total assets of EUR 192 million and a market share of 5.5% in new business volume as of the end of 2023. PBZL is a wholly-owned subsidiary of Privredna banka Zagreb d.d., which is ultimately owned by Intesa Sanpaolo S.p.A.

EBRD Finance Summary: EUR 25,000,000.00

Total Project Cost: EUR 25,000,000.00

The EBRD’s involvement is crucial due to the unavailability of similar financing from commercial sources on reasonable terms. The Bank provides a large-volume instrument filling a market funding gap and offers expertise, innovation, and knowledge that are pivotal to the project’s success. This long-term relationship with the client facilitates the willingness to undertake more risks and finance, leading to outcomes such as innovation or expansion into new markets.

The project is categorized as FI under the 2019 Environmental and Social Policy (ESP). An Environmental and Social Due Diligence (ESDD) concluded that PBZ Leasing complies with Performance Requirements (PRs) 2, 4, and 9. PBZL will continue to adhere to these PRs, including the EBRD’s E&S Risk Management Procedures for Leasing Activities, and submit annual reports on E&S matters.

Any activity listed under Annex 2 of the Environmental and Social Policy will need to be referred to the EBRD before financing. Potential renewable energy projects will follow specific E&S Eligibility Criteria for various renewable sources. Sub-borrowers are required to comply with national environmental, health, safety, and labor requirements.

This €25 million loan from the EBRD to PBZ-Leasing Croatia marks a significant step in supporting the MSME sector in Croatia. By providing crucial financial support and promoting sustainable practices, the initiative aims to strengthen the competitiveness and resilience of local enterprises, contributing to a greener and more robust economy.