Minister of Regional Development and EU Fund Management Branko Grcic said the absorption of EU funds within the IPA programme at the end of last year was 37 percent, adding that the absorption capacity should be at least doubled.

Withdrawing EU funding requires well-prepared projects, people who will prepare them and money to pay for their services, Grcic said.

He said the number of administration staff working on the absorption of EU funds should be increased from the current 350 to 550, adding that first the current staff would be educated about the absorption of EU funds, after which more staff would be hired.

The programme for the preparation and implementation of development projects suitable for EU funding in 2012 is designed to support development projects carried out by local and regional organisations, and the financial framework for this year totals 30 million kuna of non-refundable money from the ministry's fund. There is a plan to increase that amount in years to come.

The programme has four sub-programmes - preparation of regional development projects; preparation of local development projects in subsidised areas; co-financing implementation of projects funded by the EU; and preparation of national strategic projects.

The programme for the provision of loans for projects that are candidates for the Instrument for Pre-accession Assistance (IPA) programme refers to the financing of projects applying for co-funding from IPA components, which are not covered by the existing HBOR credit schemes.

The users of those loans are units of local and regional self-government, companies whose majority owner is the state or local self-government units, other users meeting criteria of the IPA programme and commercial banks which are to cooperate with the HBOR in the implementation of the programme.

The annual interest rate is three percent for new investments in tourism, agriculture, industry, environmental protection, energy efficiency and renewable energy sources (this year), while the interest rate for other projects will be four percent, HBOR Management Baord chair Anton Kovacev said.

The minimum amount of such loans is 80,000 kuna (slightly more than 10,000 euros) and there will be no limit on the maximum amount. Loans will be granted in kuna, with a grace period of three years and a payment period of 15 years, including the grace period.

Kovacev recalled that so far the HBOR had supported projects for which EU funding had been approved with loans in the amount of some 900 million kuna (EUR 120 million).