Čvor lučko, autocesta.jpg
Photograph: Suradnik13 / hr.wikipedia.org

At its session on Thursday, the government forwarded a bill into parliament confirming a guarantee agreement between the Republic of Croatia and the European Bank for Reconstruction and Development (EBRD) to finance the restructuring of the state-owned motorways operator HAC and approving a new loan of 200 million euros.

The guarantee agreement refers to a loan of EUR 250 million for a period of 15 years and a 2 year grace period which was signed in late March by Finance Minister Zdravko Maric and EBRD Director for Croatia Vedrana Jelusic Kasic.

The bill requires the government, as the guarantor for the EBRD loan, to provide an unconditional guarantee as the principal debtor and not just as a guarantor that it will duly pay its dues and will regularly execute all other obligations of HAC.

In order for HAC to be in a position to cover its loan obligations falling due this year, the government will give its permission for HAC to take out two loans of 100 million euro each that will be guaranteed by the state.

HAC will take the loans for a period of eight years with a four-year grace period and four-year repayment period with an effective annual interest rate of 4.2% and a state guarantee as collateral for the entire amount of the loan.

Maritime Affairs, Transportation and Infrastructure Minister Oleg Butkovic explained that this year EUR 466 million of principal and EUR 124 million of interest fall due, or a total of EUR 590 million which needs to be re-scheduled.

HAC is obliged to secure EUR 400 million in order to finance its business operations in 2016. HAC plans to secure EUR 200 million from the EBRD loan and the remaining EUR 200 million from the two new loans from a group of Croatian banks.

In addition, the state's road authority - Hrvatske Ceste (HC) - too will take a loan of EUR 89 million to finance the construction and maintenance of state roads and to settle its loan liabilities maturing this year. The government will also go as guarantor for this 10-year loan.

Butkovic said that a significant amount falls due for this loan in the amount of more than HRK 1.8 billion, HRK 1.4 billion accounting for principal. Of that loan, HRK 588 million will be used to settle the liabilities due and the remainder will go towards investment projects.

HAC and HC, as well as a few other public companies, will be excluded from a government decision defining the amount, method and schedule of profit generated by strategic companies to be paid into the state budget, Finance Minister Zdravko Maric said.

Pursuant to the government's decision, the said companies are required to deposit 60% of last year's net profit directly into the state budget with the exception of the Alan defence industry agency which is required to pay its entire profit, which will then be used for the upgrade of the Croatian Armed Forces, Minister Maric said.

Related stories

EBRD approves EUR 250mn loan to HAC motorways operator

EBRD and HAC sign EUR 250 million loan agreement

EBRD loan agreement for Sisak wastewater project amended

Gov't grants consent for road operator to seek EUR 80 mln loan

Latest news

Turkey removes restrictions on Islamic headscarves in the military

Female members of the Turkish military, including officers, will be allowed to wear the Islamic headscarf as long as it is color-compliant with their uniform, the Defence Ministry said on Tuesday, according to the state-run Anadolu news agency.

Protesters clash with police in Nepal anti-government shutdown

Anti-government protesters clashed with police in towns across southern Nepal and attacked a municipal building Wednesday as they forced a shutdown in the region over local elections.

Pollster: Trump presidency is causing Germany's AfD to lose support

A prominent German pollster said Wednesday that the "chaotic" leadership of US President Donald Trump has caused an electoral decline for Germany's right-wing Alternative for Germany (AfD) party.

Iraq's powerful Shiite militia attacks Islamic State near Mosul

Baghdad (dpa) - Iraq's powerful Shiite militia launched a major attack Wednesday to recapture areas near the city of Mosul from Islamic State, backing an ongoing government offensive against the radical Sunni group.

11 Bosnian citizens wanted by Interpol for terrorism

Acting on a request by Bosnia and Herzegovina, Interpol has issued an international arrest warrant for a national of that country, Amir Dzinic, for links to the terrorist organisation Islamic State, Bosnian media said on Wednesday.

Pakistani TV channel in hot water for airing film about lesbians

Pakistan's state media watchdog has warned a private TV channel for airing a film on the relationship between two lesbians, saying it was against the "social, ethical and societal norms of the country."

Stolen gate from former Nazi camp returns to Germany

A gate stolen in 2014 from a former Nazi concentration camp will be returned to the Dachau memorial site on Wednesday, after its return to Germany from Norway.

China wants to open 50,000 football schools by 2025

China plans to open 50,000 football schools by 2025, as part of a long-haul effort to become a world leader in the game, Chinese state media reported Wednesday.

Airbus profits take hit after write-off on new military aircraft

Airbus Wednesday announced that its profits for 2016 were down 63 per cent to 995 million euros (1,046 million dollars) after a major write-off on a troubled programme to develop a new military transport aircraft.

Monitor: Israeli jets hit arms depots near Damascus

 Israeli warplanes Wednesday hit arms depots near the Syrian capital Damascus, a monitoring group reported.

S African court invalidates International Criminal Court withdrawal

South Africa's government must seek legislative approval before it can withdraw from the International Criminal Court, ruled a court Wednesday, throwing up a roadblock to attempts to part ways with the international tribunal.

Senior Yemeni army commander killed while fighting rebels

A senior commander of Yemeni government troops died Wednesday while fighting rebels in the war-torn country's south-west, according to military sources.