Today, the Commission has positively assessed Croatia’s modified recovery and resilience plan, which includes a REPowerEU chapter. The plan is now worth €10 billion (€5.8 billion in Recovery and Resilience Facility (RRF) grants and €4.2 billion in RRF loans) and covers 84 reforms and 253 investments.
Croatia’s proposed REPowerEU chapter, worth €2.9 billion, includes one new reform, three scaled-up reforms, as well as five new and three scaled-up investments drawing on existing measures. The chapter also covers three existing investments, including one scaled-up investment, transferred from the original plan. These measures help deliver on the REPowerEU Plan‘s objectives to make Europe independent of Russian fossil fuels well before 2030. They focus on promoting energy efficiency in buildings, reducing the dependency on fossil fuels by increasing the production and uptake of renewables such as sustainable biomethane, renewable hydrogen and geothermal energy, accelerating the deployment of renewable energy, addressing energy poverty, addressing bottlenecks in electricity distribution, zero-emission transport, requalifying the workforce towards green skills and improving security of energy supply and diversifying the Union’s gas supply.
In addition, Croatia’s modified plan also includes new and scaled up reforms and investments in the areas of business environment, water management, education, digital transition, as well as building reconstruction.
Croatia’s changes to the original plan are based on the need to factor in:
- objective circumstances hindering the fulfilment of certain measures as originally planned, including the high inflation experienced in 2022 and 2023 and supply chain disruptions caused by Russia’s war of aggression against Ukraine;
- the request to take up €4.2 billion in available RRF loans;
- the downward revision of its maximum RRF grant allocation, from €6.3 billion to €5.5 billion. This downward revision is a result of the June 2022 update to the RRF grants allocation key and reflects Croatia’s comparatively better economic outcome in 2020 and 2021 than initially foreseen
To finance the increased ambition of its plan, Croatia has requested to transfer to the plan its share of the Brexit Adjustment Reserve (BAR), in line with the REPowerEU Regulation, amounting to €7.2 million. These funds, added to Croatia’s RRF and REPowerEU grants allocation (€5.5 billion and €269 million respectively) and to its RRF loan request of €4.2 billion, make the approved overall modified plan worth €10 billion.
An additional boost to Croatia’s green transition
The modified plan has a strong focus on the green transition, allocating 39% (down from 40.3% in the original plan) of available funds to measures that support climate objectives.
The new measures included in the REPowerEU chapter contribute significantly to advance Croatia’s efforts on the green transition. The new reform aims at increasing green skills and competences in the construction sector for non-EU workers. The scaled-up reforms encourage the uptake of renewable energy sources by introducing a new self-consumption system, envisage new activities contributing to raising citizens’ awareness on the green transition and provide additional funds for the development of additional green urban renewal strategies. The five new investments will increase the transmission and distribution capacities of the electricity network, establish a hydrogen-based economy through the North Adriatic Hydrogen Valley, strengthen the use of renewable energy sources in transport and heating, expand the capacity of the LNG Terminal on the Island of Krk and strengthen the gas transmission network towards Slovenia and Hungary. The scaled-up investment aims to support sustainable transport, the energy efficiency and post-earthquake reconstruction of buildings and energy poverty.
Reinforcing Croatia’s digital preparedness and social resilience
The revised Croatian plan’s digital ambition has remained at the same level as the original plan, allocating 20% of its available funds to support the country’s digital transition. It includes the digitalisation of public services through the establishment of the registry of population, families, and households. This registry provides statistics essential for the work of all public bodies, including the tax administration. The transport sector is also covered through the new electronic tolling system project. Additional investments in smart energy systems and related storage also contribute to the digital ambition of Croatia’s plan.
The plan’s important social dimension has also increased with its modification. In addition to the transformative reforms and investments of the original plan, new measures include significant scaled-up investment in schools in order to support single-shift and full day teaching.
Next steps
The Council will now have, as a rule, four weeks to endorse the Commission’s assessment. The Council’s endorsement will allow Croatia to receive €585 million in pre-financing of the REPowerEU funds.
Under the RRF, Croatia has so far received €2.2 billion: €818 million in pre-financing and €1.4 billion disbursed in total for the first two payments.
The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in Croatia’s revised recovery and resilience plan, reflecting progress on the implementation of the investments and reforms.
For More Information
Commission’s positive assesment of Croatia’s revised plan
Croatia’s Recovery and Resilience Plan website
Recovery and Resilience Facility: Questions and Answers
REPowerEU chapters and revision of recovery plans