Croatian capital Zagreb to get vital infrastructure upgrades with €207 million EIB loan

• City of Zagreb to invest in renewable energy and energy efficiency projects, social and affordable housing, schools and kindergartens, public transport, and other improvements key for better living and doing business environment in the Croatian capital
• Credit builds on recent start of direct EIB lending to Croatian municipalities

The European Investment Bank (EIB) is extending a €207 million credit to the City of Zagreb in Croatia for infrastructure upgrades critical for the Croatian capital’s sustainable development.  The financing marks the EIB’s first loan signature with the City of Zagreb. The credit is the initial tranche of a €395 million EIB framework loan to support the city’s development in the next five years.

The EIB framework loan will support Zagreb projects to expand renewable energy, energy efficiency, affordable social housing, and schools and kindergartens. The financing will also go towards improving the public transport network including the iconic Zagreb funicular and further digitalising city services and allow small-scale municipal infrastructure investments in streets, sewage and water network, regeneration and revitalisation of brownfield areas for new investments.

In addition, the EIB will provide advisory services to Zagreb in preparing investment projects vital for enhancing the quality of life and business environment in the city.

“Zagreb is getting a strong boost to its impressive plan to improve vital urban infrastructure and we are very proud of our contribution to the green and sustainable chapter of the city`s history,” said EIB Vice-President Tereza Czerwinska. “Together with our advisory support, we will help Zagreb develop and address complex issues like affordable housing, climate neutrality and urban mobility. This loan highlights a constantly maturing relationship between the EIB and Croatia.”

"This is the first time that the EIB is investing in the City of Zagreb's projects, which is a recognition of the City's responsible financial management, which has also been recognised by the EIB. The cooperation comes after Zagreb's investment rating was restored after 13 long years. We will use the loan exclusively for capital investments, not for recurrent costs, and primarily to co-finance EU projects in the field of green and energy transition and digitalisation, to make Zagreb more resilient to climate change. We thank the EIB for its trust and for becoming our partner in building a better Zagreb for the benefit of all our fellow citizens," said Tomislav Tomašević, Mayor of the City of Zagreb.

Financial and advisory support from EIB for a sustainable development of Zagreb

The financing stems from the EIB’s strategic commitment to accelerate the cohesion of regions in the European Union, climate action and the development of digital, green and affordable cities. The agreement will help Zagreb mobilise and absorb EU funds and improve its attractiveness to investors, paving way for faster job creation and bolstering the city’s commitment to become climate neutral by 2030.

The credit is the second direct EIB loan to a local government in Croatia. In December 2023, the EIB signed a loan agreement of €49 million with the City of Split for investments in the urban infrastructure.

Background information

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400,000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil-fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB's financing within the EU is directed towards cohesion regions, where per capita income is lower. This underscores the Bank's commitment to fostering inclusive growth and the convergence of living standards.