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Hungary to get €500 million in first phase of EIB loan

Hungary said today it signed an agreement with the European Investment Bank (EIB) on payment of €500 mln, the first phase of an approved loan totalling €1.5 bln that is designed to allow this country to co-finance priority projects receiving support from the European Regional Development Funds and the European Social Fund within the 2014-2020 EU programming period.

The EIB said the loan will back development of the knowledge economy, particularly RDI, higher education and ICT, while also contributing to improving education, employability, health and social inclusion of Hungarians. Furthermore, EIB said, the loan will support projects fostering increased use of renewable energy, improving energy efficiency and upgrading tourism facilities, while regional projects will address sustainable urban and regional development.

Grants by the EIB are being provided in the form of a Structural Programme Loan, an EIB announcement says. In addition to large-scale projects, the EIB loan may also be used to finance smaller schemes, which, due to their limited size, would otherwise not qualify for direct EIB financing, it adds.

The announcement noted that the EIB has had a long history of cooperation with Hungary. Earlier this year, the bank provided €500 mln for co-financing projects in Hungary under the country’s Integrated Transport Development and Environment and Energy Efficiency Operational Programmes and the Connecting Europe Facility.

“The EIB’s loan will co-finance strategic projects in Hungary with a total investment volume of nearly €15 bln.  The combination of the EIB loan and EU grants will enable Hungary to meet its national strategic priorities – supporting sustainable economic growth and improving the everyday life of citizens by boosting labour productivity, promoting economic and inclusive growth and increasing the number and quality of jobs,” EIB Vice-President László Baranyay said.

Hungary’s National Economy Minister Mihály Varga said: “We signed today the first part of the Structural Funds Co-financing II. framework loan for the co-financing of four Operational Programmes. We are thankful for EIB for co-financing these Programmes under which the Hungarian State would like to implement priority projects in the field of economic development, research and development (R&D), SME financing, employment, education, health care, regional development and tourism, which are expected to foster economic and social development in Hungary and the further integration within the EU.”