EBRD €100.000.000 TOURISM CREDIT FACILITY
FOR MONTENEGRO AND CROATIA
EBRD has provided a credit line of up to €100.000.000 for financing tourism facility developments in Montenegro and Croatia. The credits will be dispersed through Erste Bank Croatia.
Purpose: The credit line will be used to finance private sector investments in tourist facilities in Croatia and Montenegro. Borrowers will be able to use the funds to finance construction, redevelopment or acquisition of hotels.
The credit may also be used for refinancing the existing loans raised for the same purposes (because of better interest rates, longer repayment period or other benefits).
Besides hotels, the credit facility may be used for investments in marinas, camping, entertainment, tour operators and other tourism activities, subject to prior EBRD approval.
Max amount: €20.000.000. However, an applicant may raise even a higher loan, say, for example, €30.000.000, but, the additional amount above €20M will be provided by Erste Bank.
Max term: 15 years, in certain circumstances it may be longer than 15 years, contact us for further details. The grace period, collaterals, repayment model (amortisation, balloon etc) and other terms and conditions of the loan will be established in negotiations with the Bank.
Interest rate-will depend on the type of investment project, quality of the loan application documentation, Bank’s perception of the risk and similar. The loans are expected to be competitively priced in the current financial markets in Montenegro and Croatia. For well presented good quality projects we expect interest rates to be below 3%.
Minimum equity-equity participation by the borrower will be 15-30% (LTC 70-85%) depending on the Bank’s perception of the risk of the project and other relevant factors.
Other terms and conditions: standard lending policy of the Bank will apply. The credit application will be considered on the merits of the project to be financed. Therefore, a good quality project financial documentation is essential for securing the loan-feasibility study, business plan, cash flow financial modelling and other essential parts of the credit application documentation.
The borrower will also receive free of charge technical support for better utilisation of the loan such as management consulting, staff training and similar.
As a conclusion- this is the first such credit facility available to Tourism Sector in Montenegro and Croatia. It is attractive because of the large loan amount that may be borrowed, particularly relevant for large scale investment projects, competitive interest rates, low equity participation and long repayment periods and other applicable benefits.