Croatia: Tourism investment crucial to economic recovery
Airport, port deals help expand capacity; Private and public lenders show support
With tourism accounting for more than 22% of Croatian GDP – almost triple the average for the European Union, which Croatia hopes to join in 2012 – upgrading and expanding the country’s infrastructure to support its holiday industry is of crucial importance. Despite the fact that Croatia is still mired in recession – GDP fell by more than 6% in 2009 and is expected to decline further by 1% or so this year – the country has managed to attract much-needed funding from both the private and public sectors to ensure it can exploit its stunning coastline to maximum effect.
First, Austria’s Erste Group announced that it had put up €19 million for the expansion of the international terminal at Dubrovnik airport, and shortly after the European Bank for Reconstruction and Development announced at its annual general meeting in the Croatian capital Zagreb that it had granted a €12 million loan to expand the port of Sibenik.
"Tourism in Croatia accounts for roughly one-fifth of its GDP, which makes investing in it a key priority"
Commenting on its financing of the airport terminal at Dubrovnik, Werner Weihs-Raabl, head of the infrastructure finance and public sector team at Erste Group, says: "Tourism in Croatia accounts for roughly one-fifth of its GDP, which makes investing in it a key priority for us. Dubrovnik is especially important, as it is Croatia’s holiday hot spot and particularly attractive for foreign tourists." He adds: "As Croatia is best reached by air and tourists come from all over Europe, it is vital that the airport’s size and capacity can match its international demand. By helping double the airport size, we have now achieved this."
Zagreb airport also hopes to secure funds for a new terminal by the end of the year. Tonci Peovic, a director at the airport, says Zagreb is seeking €150 million to build the first phase of a new 40,000 square metre facility by 2015. A further two-phase expansion costing €116 million will follow.
Separately, the EBRD is supporting the development of regional transport infrastructure and tourism network in the country with a €12 million loan for the port of Sibenik, 80 kilometres north of Croatia’s second city of Split. The Croatian government wants to diversify tourism through the promotion of lesser-known destinations, with Sibenik viewed as the gateway to two national parks and neighbouring islands. The EBRD loan, guaranteed by the Croatian government, will be used to increase the port’s capacity, easing congestion in the busy summer period and allowing larger cruise ships to use the port. New passenger terminal facilities are also planned.
"The improved infrastructure will help raise the visibility of Sibenik, its surroundings and nearby islands as holiday destinations," says Thomas Maier, managing director for infrastructure at the EBRD in London.