Investment in three equity funds

• Up to EUR 205 million of investments in SMEs and mid-caps (up to 3,000 employees) will be unlocked
• The European Investment Fund (EIF) and the Croatian Bank for Reconstruction and Development (HBOR) will invest more than EUR 70 million in three private equity funds that will begin to operate this autumn

The EIF and HBOR will invest more than EUR 70 million into three private equity funds in Croatia: Prosperus Growth Fund, Adriatic Structured Equity Fund and Croatian Mezzanine Debt Fund, through which SMEs and mid-caps will have easier access to capital, an alternative source of financing and more flexible transaction structure.

The operation stems from the EUR 80 million-strong Croatian Growth and Investment Programme (CROGIP), launched by the EIF and HBOR in 2019 to provide Croatian SMEs and mid-caps with new sources of financing for growth, expansion, innovation and improved competitiveness and to support development of the Croatian private equity market. The EIF and HBOR committed each EUR 40 million to finance this programme that is expected to accelerate additional private-sector investment into equity funds and thus attain the amount of up to EUR 205 million to be invested in companies.

Tamara Perko, President of HBOR's Management Board, said: „It makes us very proud that HBOR took part in the establishment of the funds, through which entrepreneurs will have an alternative form of financing. Since the private equity market in Croatia is still underdeveloped, HBOR initiated a number of activities for promoting the development of this form of financing. With HBOR's support, a venture capital fund intended for start-ups began to operate last year (FRC2 Croatia Partners). With the establishment of these three funds, alternative forms of financing will be made possible from this autumn onwards for more mature companies as well, regardless of the sector they operate in."

Alain Godard, Chief Executive of the EIF, said: „It's a great pleasure to see our partnership with HBOR through CROGIP delivering on its pledge to create additional sources of financing for Croatian SMEs and mid-caps, further modernize financial market in Croatia and level it up with the EU standards. This is just one of the examples of how EIF's cooperation with HBOR transforms Croatia into an even better place to do business, and I am proud of the EIF's growing role in this process. We look forward continuing as one of the key facilitators of Croatia's sustainable development, especially supporting SMEs and mid-caps recover faster from COVID-19 pandemic."

Valdis Dombrovskis, European Commission Executive Vice-President for an Economy that Works for People, said: „The European Commission and the European Investment Bank Group continue to help small and medium-sized companies face the devastating socio-economic effects of the coronavirus crisis. The more we protect businesses and jobs now, the faster the economic recovery will be. This will make a big difference to many companies in Croatia, both SMEs and mid-caps, by making more than EUR 200 million in fresh financing available to them at this challenging time."

From the autumn, Croatian companies can contact the funds that will make their own decisions on individual investments.

The average size of investment ticket available is expected to range between 2 and 8 million euros.