Funds will finance restructuring of a state-owned road company HAC
The European Bank for Reconstruction and Development (EBRD) and Hrvatske autoceste d.o.o. (HAC) – a state-owned limited liability company in charge of the construction, maintenance and tolling of Croatia’s motorways – have signed a loan of up to €250 million.
The EBRD’s sovereign-guaranteed loan will come in two tranches: €200 million will be used to refinance a portion of HAC’s sovereign-guaranteed debt falling due in 2016. The remaining €50 million will finance operational and efficiency improvements and may serve as a basis for preparing the company for private sector participation, subject to the government’s future strategic decision.
HAC has established HAC-ONC as a subsidiary in charge of maintenance and tolling of the motorway network, totalling 925 kilometres. The EBRD loan will support the restructuring of the subidiary. Consultancy services will be provided under the EBRD’s Infrastructure Project Preparation Facility in the form of €500,000 in grant funds.
Oleg Butković, Minister of Maritime Affairs, Transport and Infrastructure, added: “This loan agreement between Croatian Motorways and the EBRD is one more step towards restructuring of the motorways sector and debt refinancing. The loan is supported by grant funds that will finance consulting services for the improvement of motorways system, including tolling. Part of the loan will be used for payments.”
Sue Barrett, EBRD Director for Transport, said: “The EBRD has financed the construction and upgrade of several sections of motorway in Croatia with HAC. This relationship means that the Bank is well-placed to support the restructuring of the company. This is essential to ensure that it is commercially run with good corporate governance ahead of the next phase, which is expected to involve private sector engagement.”
Vedrana Jelušić Kašić, EBRD Director for Croatia, added: “Croatia has invested heavily in road infrastructure over the last two decades through an extensive investment programme. The Bank’s new loan is supported by a technical assistance package funded by the Bank’s donors to support the development of the company’s restructuring plans. Our loan addresses the sector’s need for long-term finance and the need to improve the efficiency of operations.”
Davor Mihovilić, President of HAC’s Management Board, said: “The loan agreement we are signing with the EBRD today is very important to us as it will not only enable HAC to refinance part of its debt but also to implement corporate restructuring, providing a sound basis for our future operations. We are glad that the EBRD has renewed our partnership not only with financing, but also with project preparation and implementation.”
The EBRD has been active in Croatia as an investor since the country’s independence and has invested some €3.2 billion in more than 183 projects to date. The Bank’s activities include all sectors of the economy.