Croatia Secures €100m World Bank Loan to Strengthen Disaster Resilience

Croatia has taken a major step to strengthen its disaster preparedness and resilience after signing a €100 million Disaster Preparedness and Resilience Development Policy Loan with the World Bank, featuring a Catastrophe Deferred Drawdown Option (Cat DDO).

The agreement was signed by Deputy Prime Minister and Minister of Finance Marko Primorac and Anna Akhalkatsi, World Bank Division Director for the European Union. The financing will enable Croatia to rapidly mobilise resources in the aftermath of natural disasters, strengthening emergency response while protecting fiscal stability and vulnerable communities.

Croatia faces growing risks from earthquakes, floods, landslides, heatwaves, droughts and wildfires, with average annual economic losses estimated at 0.8 per cent of GDP. The devastating 2020 earthquakes alone caused damages of around €16.1 billion — nearly 24 per cent of GDP, underscoring the urgency of stronger financial and social protection systems.

"This €100 million loan marks a significant milestone in Croatia's efforts to enhance disaster preparedness and resilience," Mr Primorac said. "It gives us critical tools to manage the fiscal impacts of natural disasters and to respond swiftly and effectively when emergencies occur, while safeguarding lives, jobs and economic progress."

This is Croatia's first Cat DDO, and the reform programme focuses on strengthening resilience across three key pillars. The first pillar targets national reforms to improve infrastructure management and institutional capacity for climate and disaster adaptation. The second supports reforms in strategic sectors — including energy, tourism and housing — to expand renewable self-supply of electricity, scale resilient tourism investments, and accelerate safety-focused upgrades in multi-apartment buildings. The third pillar promotes greater disaster insurance uptake and strengthens recovery support for vulnerable populations.

Anna Akhalkatsi said the programme strengthens Croatia's ability to manage shocks while supporting inclusive growth.

"This project helps protect lives, jobs and development gains by building institutions that are better prepared to manage risk and respond to emergencies," she said. "It supports Croatia's vision of a safer, more resilient and equitable future."

The Cat DDO has a three-year duration and provides contingent financing that complements budget reserves, acting as a source of immediate liquidity and bridge financing while longer-term recovery funds are mobilised after a disaster. It forms part of the World Bank's Crisis Preparedness and Response Toolkit and aligns with priority objectives under the Country Partnership Framework for Croatia for FY25–FY30.

Through the toolkit, Croatia will also have access to the Rapid Response Option, allowing up to 10 per cent of undisbursed funds from existing World Bank projects to be quickly repurposed for urgent recovery needs.

Government agencies, local authorities and stakeholders are encouraged to engage early as Croatia strengthens its disaster preparedness framework and builds long-term resilience against future shocks.