ZAGREB, 14 Nov (Hina) - The Ministry of Tourism and Sport unveiled a new financial instrument - loans for sustainable tourism, for which €170 million has been allocated.

This financial instrument was jointly prepared by the Ministry of Tourism and Sport, the Ministry of Regional Development and European Union Funds, and the Croatian Bank for Reconstruction and Development (HBOR).

The funding comes from the European Regional Development Fund and the Competitiveness and Cohesion Programme.

The instrument was designed to support financially sustainable investments and provide businesses with more favourable terms and funding for projects that contribute to the development of sustainable tourism.

The credit line offers amounts from a minimum of €250,000 to a maximum of €7 million. Up to 50% of the loan principal can be written off if the set criteria are met.

Eligible applicants are micro, small and medium-sized businesses operating in the tourism sector.

Up to 85% of the total investment will be financed. The repayment period is up to 17 years, including a four-year grace period.

The loans are intended for hotels and similar accommodation establishments and campsites for their investments in fixed and working capital, the construction or reconstruction and renovation of existing facilities, equipment, and introduction of additional amenities.

Minister of Tourism and Sport Tonči Glavina said that this is a very competitive financial product that encourages entrepreneurship in tourism and aims to raise the level of quality of the tourist service.

HBOR Board President Hrvoje Čuvalo said that interest rates depend on the riskiness and rating of the project, and will be lower for those with better ratings.