National Recovery and Resilience Plan (Initiative: Reconstruction of Buildings)

The Government adopted the National Recovery and Resistance Plan 2021-2023, that was approved by the European Commission in July 2021.

At its session held on 8 July 2021, the Government adopted the Decision on the governance system for and monitoring of the implementation of activities under the National Recovery and Resilience Plan 2021-2026, laying down the institutional framework and procedures linked to coordination regarding the implementation of activities under the National Recovery and Resilience Plan 2021-2026 (NPOO) within the framework for European Union economic governance - the recovery and resilience mechanism at the level of the Government of the Republic of Croatia.

The Decision also defines institutions that perform functions of governance, coordination and monitoring of the implementation of activities under the National Recovery and Resilience Plan and of other bodies, as well as their functions and responsibilities.

An integral part of the National Recovery and Resilience Plan 2021-2023 is the chapter on financing the reconstruction of earthquake-damaged buildings along with energy renovation in the area of Zagreb, Krapina-Zagorje, Zagreb, Sisak-Moslavina and Karlovac County.

The National Plan contains project proposals in six areas totalling HRK 49.1 billion.

The Plan is structured to include five components and one initiative:
These components include 22 thematic sub-components enumerating specific reforms and investment needs.

Out of the HRK 49.1 billion worth of projects proposed in the Plan, 54 percent of the required NPOO allocations refer to economy.

15 percent (7.5 billion) are earmarked for projects in education, science and research, 10 percent (4.8 billion) for public administration, justice and state property, four percent (2.1 billion) for the labour market and social protection, nine percent (2.6 billion) for health care, 12 percent of the allocation (HRK 5.9 billion) for reconstruction of buildings.

Drafting and delivering the Plan to the European Commission is a condition for the use of EU Recovery and Resilience Mechanism (RRF) funds from 2021 to 2023.

Within the framework of this mechanism, Croatia has at its disposal EUR 6.3 billion (HRK 47.5 billion), with an additional EUR 3.6 billion (HRK 27.1 billion) of loans.

“The idea is for the Plan to help Government reforms, public and private investments and GDP growth,” Prime Minister Andrej Plenković said.

He also stressed that in order to use funds from the EU's recovery mechanism, Croatia must implement reforms, as these funds are subject to conditions and criteria.

In addition to reforms, the conditions also include directing at least 37 percent of the funds to investments that contribute to the green transition and at least 20 percent to the digital transition.

All EU countries, including Croatia, have the obligation to send their national recovery and resilience plans for adoption to the European Commission by the end of April.

In the EU regulation proposal, it is envisaged that the first 10% of the financial contribution for each EU country will be paid after adoption, i.e. approval of the Recovery and Resilience Plan. For Croatia, this would mean about 600 m EUR in the second half of this year.

The investments proposed in the plan shall be completed by 31 August 2026.

The initiative “Reconstruction of buildings”

In the midst of the pandemic Croatia was also hit by two devastating earthquakes that caused significant material damage and afflicted many citizens who were forced to leave their homes temporarily or permanently. The estimated damage caused by the earthquakes in Zagreb and the Banovina region amounts to HRK 129 billion, which is almost equivalent to the annual state budget. This will thus, in the years ahead, represent a major challenge for citizens in the earthquake-affected areas, as well as for public finances. Croatia is in the process of reconstruction and revitalization of the affected areas, and the goal is not only to re-establish the original state, but to fully transform the buildings sector by seismic strengthening and energy efficiency of buildings. The goal is to build back better and stronger in order to make buildings more resistant to potential future earthquakes.

The programmes covered by this component of the Recovery and Resilience Plan will foster the overall reconstruction of buildings and highly efficient alternative systems. Particular attention will be paid to ensuring healthy indoor climate conditions, fire protection and protection from risks associated with enhanced seismic activity. The objective of this Initiative is to contribute to the wave of reconstruction of buildings, which implies transformation into an energy-efficient and decarbonised building stock. The reconstruction will include residential and non-residential buildings, as well as public buildings, along with taking into account the importance of the public interest in health and educational buildings. Investments under the Recovery and Resilience Plan will contribute to more effective post-earthquake reconstruction and seismic safety of buildings.