IPARD - DEVELOPMENT OF RURAL ECONOMIC ACTIVITIES

 Loan Programme for IPARD Measure 302 Candidate Projects

1. Final Borrowers

Natural persons and legal entities that belong to the category of micro-entities within the VAT system and that:

• employ fewer than 10 employees, and
• have assets of up to EUR 2,0 million or annual turnover of up to EUR 2,0 million, and
• are 100% privately owned or up to 25% state owned, i.e. owned by local and/or regional government units or the City of Zagreb

Borrowers can be natural persons and legal entities that have entered into a contract on the Allocation of Funds under the IPARD Programme with the Paying Agency for Agriculture, Fisheries and Rural Development.

Potential borrowers have the option to apply for a loan to HBOR or commercial bank immediately after submission of tender documents to the Agency for payments in agriculture, fisheries and rural development, and as a proof is delivered copy of the return receipt with the seal of the Agency.

Pursuant to the Conflict of Interest Prevention Act (Official Gazette of the Republic of Croatia Nos. 26/11, 12/12, 126/12, 57/15), restrictions are in force on lending to business entities whose ownership interests are owned by public officials and their family members. The provisions of these restrictions are deemed a constituent part of HBOR loan programmes. The full wording of the restrictions can be found at: Restrictions on Lending to State Officials.

2. Purpose of the Loan

The goal of the Programme is to finance candidate projects for co-financing through Measure 302 of the IPARD Programme in the manner that the entire investment is financed including eligible and non – eligible expenses in accordance with the Ordinance on the Implementation of Measure 302 “Diversification and Development of Rural Economic Activities” under the IPARD Programme (hereinafter: the Ordinance).

Investments will be financed in accordance with the ordinance as follows:

• Investments in rural tourism
• Investments in traditional crafts
• Investments in direct sale
• Investments in freshwater fishery
• Investments in services sector
• Investments in onsite processing at farms
• Investments in renewable energy resources

Loans under the Loan Programme are untended for investments in:
I. Fixed assets	construction/reconstruction and equipment of buildings construction and reconstruction of as well as equipment for renewable electricity generation facilities or co- generation facilities machines, equipment, tools and devices hardware and software boats, fishing boats nucleus school of fish cattle
II. Permanent working capital	up to 15% of loan amount

3. Manner of Implementation

• via commercial banks
• direct lending
• risk-sharing model - small and medium enterprises
• risk-sharing model

4. Loan Amount, Disbursement Period and Repayment

Loan amount	The maximum loan amount is not limited and depends on HBOR’s financing possibilities, the investment project, the necessary investment, the credit worthiness of the borrower as well as the value and quality of collateral offered. The loan amount is determined depending on the loan purpose.
Generally, HBOR finances up to 75% of the estimated investment value, VAT not included. In the case of fitting into state aid regulations in force, it is possible to finance up to 100% of the investment amount. HBOR can, in certain cases, consider a possibility of financing the estimated investment value with VAT.
Disbursement period	up to 12 months
Grace period	up to 2 years
Repayment period	up to 12 years, grace period included up to 14 years, grace period included, for the financing of construction of or equipment for renewable electricity generation facilities

Loan are granted in HRK or in HRK indexed to foreign currency.

5. Interest Rate

2% p.a.

Depending on the capabilities of the final borrower in obtaining the right to the award of de minimis aid, loans comes with a general interest rate that is determined at least in the amount of reference or by stimulating the interest rate or the effective interest rate below the reference.

As an exception, in the case of financing renewable energy resource projects where project implementing entities have status of preferential electricity producers, the interest rate granted is at the level of the general interest rate based on the reference interest rate, however at least at the level of the interest rate prescribed in the loan programme.

In the case of financing renewable energy resource projects under the risk sharing model where project implementing entities have the status of preferential electricity producers, the interest rate granted can be at the level of the interest rate of the commercial bank. The interest rate is variable based on the Decision of HBOR Managing Board and pursuant to the criteria of the HBOR’s Decision on Interest Rates and the Interest Calculation Regulations.

6. Loan Application Fee

0.8% one-off, charged on the committed loan amount

7. Commitment Fee

0.25% p.a., charged on the undisbursed loan amount, starting 30 days from the date of the loan contract

8. Security

HBOR accepts:

• bills of exchange and debentures
• pledge of property or fiduciary title on the property with an insurance policy endorsed in favour of HBOR
• guarantee issued by the HAMAG-BICRO within the framework of HAMAG-BICRO Guarantee programmes
• other collateral acceptable to HBOR

In the case of on- lending via commercial bank, the final borrower negotiates collateral with the commercial bank.

9. Commercial Banks Co-operating with HBOR on the Loan Programme:

1. Addiko Bank d.d., Zagreb (RS SME); (RS)
2. Banka Kovanica d.d., Varaždin
3. Croatia banka d.d., Zagreb
4. Erste & Steiermärkische bank d.d., Rijeka (RS SME); (RS)
5. Hrvatska poštanska banka d.d., Zagreb (RS SME); (RS)
6. Istarska kreditna banka Umag d.d., Umag (RS SME)
7. Kreditna banka Zagreb d.d., Zagreb
8. OTP banka Hrvatska d.d., Zadar (RS SME); (RS)
9. Partner banka d.d., Zagreb
10. Podravska banka d.d., Koprivnica (RS SME); (RS)
11. Primorska banka d.d., Rijeka
12. Privredna banka Zagreb d.d., Zagreb (RS SME)
13. Raiffeisenbank Austria d.d., Zagreb (RS SME); (RS)
14. Sberbank d.d., Zagreb (RS SME); (RS)
15. Slatinska banka d.d., Slatina (RS SME); (RS)
16. Societe Generale – Splitska banka d.d., Split (RS SME)
17. Vaba d.d. banka, Varaždin
18. Veneto banka d.d., Zagreb
19. Zagrebačka banka d.d., Zagreb (RS SME); (RS)

The aforementioned commercial banks have been included into the financing through commercial banks.

Those commercial banks that have been included also into the financing under the risk-sharing model SME are marked by acronym RS SME; those that have been included also into the financing under the risk-sharing model are marked by acronym RS.

More detailed information relating to this programme can be obtained at: HBOR, Strossmayerov trg 9, 10000 Zagreb Phone: +385 1 / 4591-666 E-mail: kreditiranje@hbor.hr