Decision on the International Bank for Reconstruction and Development loan

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At today's government session, the Decision has been adopted on opening the procedure for stipulation of the Loan Agreement between the Republic of Croatia and the International Bank for Reconstruction and Development for the Earthquake Recovery and Strengthening Response to COVID-19 Project. The total value of the loan is EUR 200 million, and the loan will be used to restore the provision of essential services and to prevent, identify and respond to the threat posed by COVID-19 through strengthening national systems for public health preparedness.

It is a decision that has been worked hard on in recent weeks.

"As early as March 26, communication with the World Bank started, and as of April, almost daily communication and preparation of documents according to accelerated procedures went on. For this purpose, in cooperation with the Faculty of Civil Engineering in Zagreb and experts from the Croatian Chamber of Civil Engineers, the first estimates of the reconstruction cost were made. From April on, almost daily communication began, the preparation of documentation and owing to the involvement of colleagues from the Ministry of Construction and Physical Planning, the Ministry of Finance and other colleagues, as well as to the accelerated procedure by the World Bank, up to this phase the process went on much faster than usual. I am confident that it will continue at this pace," Minister Predrag Štromar is satisfied.

The project is being realized in cooperation with the Ministry of Construction and Physical Planning, the Ministry of Science and Education and the Ministry of Health, and it consists of three components. The first component of the proposed loan refers to securing urgent interventions in the protection of public safety, which implies supporting the implementation of urgent reconstruction works in order to ensure safety measures on public and/or private infrastructure, including through works to remove rubble from devastated buildings and damaged roofs, chimneys and other non-structural elements. In addition, the contract also refers to supporting the implementation of targeted rehabilitation and renovation of hospitals, primary and secondary schools in order to ensure continuity of health and educational services and to improve resistance to seismic activities as well as the preparation of programmes for the reconstruction of residential buildings. The financial envelope under the authority of the Ministry of Construction, along with the new Act, is a key step aimed at the reconstruction and recovery of Zagreb, Krapina-Zagorje and Zagreb County from earthquake consequences.

"Immediately after the earthquake, the Ministry of Construction started drafting a comprehensive Act through which the restoration of damaged buildings would be best managed. With huge involvement of the profession, for which I thank once again, we have drafted a bill that has been sent to public consultation and I believe it will be one of the first laws to be passed in the new term of Parliament. The Act, however, and then the programme and other implementing documents, are not enough in themselves. Apart from being complex in expert terms and implying an interdisciplinary approach, reconstruction will be extremely financially demanding. That is why the Government of the Republic of Croatia, in parallel to drafting the Act, initiated the process of providing funds from other sources," said Minister Štromar, adding:

"In parallel with the Ministry of Regional Development, we are intensely preparing to apply for the European Solidarity Fund and the application will be ready in time. As you know, to date the government has secured, through budget amendment, funds for urgent rehabilitation revision, but also for temporary accommodation for all those who cannot return to their homes, which I believe are the two most important measures for citizens in the short run," said the minister.

The second component of the International Bank for Reconstruction and Development loan is under the responsibility of the Ministry of Health, and it is aimed at strengthening government to rapidly and proactively monitor current and future outbreaks of the disease, with an emphasis on the Croatian Institute for Public Health. Also, support will be provided to the health care system in planning preparedness for providing optimal medical care, maintaining the necessary community services and minimising the risks for patients and healthcare professionals, in part by training in risk mitigation measures for the staff of health care institutions and employees at the front line of defence, and by providing consumables and equipment for further outbreaks of the disease.

After the conclusion of negotiations with the International Bank for Reconstruction and Development, the final agreement, minutes and supporting documents will be submitted for opinion to the ministries involved and again into government procedure, and if everything goes as planned this will be on the agenda of a government session in early June. In today's decision on opening the procedure for the conclusion of a loan agreement with the International Bank for Reconstruction and Development a delegation for negotiations and signatories of the agreement are appointed and the final preconditions for the completion of the process are established.

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