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EIB VP hails commitments to Hungarian projects

The European Investment Bank (EIB) vice president Vázil Hudák signed four separate loan agreements for a total amount of EUR 400 million and one advisory agreement, with two of the four loans guaranteed by the European Fund for Strategic Investments (EFSI), part of the "Juncker Plan", according to a press release sent to the Budapest Business Journal.

Vázil Hudák

Magyar Villamos Művek Zrt. (MVM) will receive a EUR 100 mln loan from the EIB to finance MAVIR, its subsidiary, to modernize and develop its power transmission network interconnectors with Slovakia, as reported by bbj.hu yesterday.

Budapest Bank will also receive a loan, worth EUR 25 mln, with favorable conditions to increase its lending volumes to Hungarian SMEs.

"The loans signed today demonstrate the EIB’s commitment to cohesion projects in Hungary," says Hudák, who is responsible for operations in Hungary and oversees cohesion and advisory programs at the EU bank.

"We are co-financing projects expected to have a positive impact on society and the economy, thanks to better energy generation and efficiency, improved mobility, environmental safety and education. We are also pleased to sign the first direct EFSI corporate loan with MVM and the first EFSI loan with a financial intermediary in Hungary with Budapest Bank, facilitating access to finance for innovative small and medium enterprises. All this will help Hungary to close the gaps between better off and less advanced regions."

The two other loan agreements include a large framework loan of EUR 225 mln (Cohesion Fund Framework Loan IV), aimed at financing water investments including flood prevention, as well as waste, energy efficiency, road modernization and railways. The deals also include a EUR 50 mln loan to the state-owned Diákhitel, responsible for operating the student loan system for higher education students in Hungary.

The fifth agreement is signed with the Hungarian Development Bank (MFB), to help it to establish a dedicated advisory unit for supporting Hungarian clients for the preparation and implementation of investment plans. The agreement is backed by the European Investment Advisory Hub (EIAH), the Juncker Planʼs advisory pillar.

"These agreements will have a positive impact on local economic development in Hungary," says European Commissioner for Regional Policy Corina Crețu. "They show that the Juncker Plan can play its role in bringing more cohesion to our Union fully; it helps member states and regions grow faster, and grow closer. The two EFSI deals will modernize Hungaryʼs power system, for the direct benefit of the Hungarian people, and will support Hungarian small businesses in need of a financial boost, including in rural areas. In addition, a new EIB loan signed today will help more Cohesion Policy projects in infrastructure see the light of day, and that is great news for long-term regional development in the country."