Green Investments: Financing and opportunities in Croatia
Keywords: green investments, financing, limited resources, sustainable projects, green loans, EU funds
In today's world, we face the growing challenges of climate change and the need to preserve the environment more than ever. In order to successfully respond to these challenges, it is crucial to transform each project into a "green", "sustainable" project. However, the question of (co)financing is increasingly being raised, since it is often heard that such projects are more expensive, even in the long term. more profitable.
One of the key theoretical frameworks for understanding how to deal with limited resources is called "Bricolage" (Baker and Nelson). In particular, it helps us understand how to deal with new challenges under conditions of limited resources. This could also be crucial for understanding the need for (co)financing "green" projects, since we are increasingly faced with limited resources.
Today, "green" projects have become inevitable for serious investors and investors who want to find favorable sources for financing the investment. An interdisciplinary approach and cooperation with specialists have become necessary. The first step is to form a quality team that will prepare technical, project and economic documentation, whether it is intended for application to EU tenders, to banks or to attract other investors. The second step is the identification of funding sources, followed by the preparation and implementation of the project.
EU tenders are popular in Croatia, but they require thorough preparation, patience in the process of processing by the public administration and careful implementation. Projects that are planned to start in the medium term (1-2 years) are most suitable for EU tenders, because most entrepreneurs who have applied for an EU project do not start implementing the project before they receive the Decision on Granting Support, although they can start implementing it immediately after submitting the application. while assuming the risk that the project will not be selected for co-financing.
Financial instruments and green loans, although currently less popular, with faster processes and more favorable financing conditions than standard credit lines, often represent an excellent option. For the sake of comparison, commercial loans today reach an interest rate of about 5%, while, for example, NPOO loans (HBOR), which aim at green and digital transition, can be realized with an interest rate of about 0.4% - 0.8%. The approval process is much faster, so they are an excellent opportunity for projects that are planned to start within a few months.
Tax reliefs of 50%-100% on profit tax and support for new jobs are also available to investors under the Investment Promotion Act. In this case, entrepreneurs can register a medium-term investment plan, and start implementing it immediately after submitting the application.
In conclusion, the integration of green elements into projects is key to their success. Sustainable practices are becoming more and more important in the market, and thus the number of experts with experience who can contribute to the creation of green projects, acceptable for financing, is also increasing. Entrepreneurs who incorporate sustainable development in their business have the opportunity for long-term successful financing and business.
Author is Monika Kordić
