The European Investment Bank (EIB) is providing co-financing with EU Funds in Hungary:
- EUR 184 million (HUF 57 billion) to support the rehabilitation and reconstruction of priority facilities in the Hungarian railway sector;
- EUR 33.7 million (HUF 10.4 billion) to finance the construction of a high-capacity laser research facility and installation of advanced laser technology equipment therein. This is the first EIB transaction in Hungary supported by “InnovFin – EU Finance for Innovators”, with the financial backing of the European Union under Horizon 2020 Financial Instruments.
The EIB loan supporting rehabilitation in the railway sector will co-finance projects with a total cost of EUR 1.2 billion. The individual sub-projects are located throughout Hungary. They are focused on the rehabilitation and reconstruction of various TEN-T railway lines, purchase of 42 Electric Multiple Units for commuter railway traffic around Budapest and installation of a GSM-R system on certain TEN-T corridors.
The project will contribute to improving the efficiency, comfort and safety of the railway system and will thus enhance the attractiveness of rail transport. As a result, the operation will have a beneficial impact on rail transport demand and sustainable long distance transport in Hungary.
This loan is being provided in the form of a Structural Programme Loan and it supports implementation of partly phased major projects receiving funds in both EU programming periods (2007-2013 and 2014-2020). Therefore, in addition to larger projects, the EIB loan may also be utilised to finance smaller schemes, which, due to their limited size, would otherwise not qualify for direct EIB financing.
The loan dedicated to Extreme Light research Infrastructure (ELI) will finance the design, construction and equipment of a state-of-the-art laser research facility in Szeged, in what is a brownfield development of a former Soviet military camp. This facility is part of the pan-European ELI network, with complementary research centres located in the Czech Republic and Romania.
This research infrastructure investment is a flagship knowledge economy project and the first operation in Hungary financed under the InnovFin, more specifically under the InnovFin Large Projects product. The project is labelled as Strategic European Research Infrastructure by the EU Research Council and is included in the EU Partnership Agreement with Hungary.
The EIB loan will not only facilitate ground-breaking scientific research in a number of areas (ranging from material science and nanotechnology to medicine), but also contribute to close pan-European cooperation and exchange between R&D institutions and scientists. Furthermore, on a national Hungarian level, it will contribute to the growth of the local economy and strengthen the position of specific R&D in the country and in the region, further supporting the objective of EU convergence.
Mr László Baranyay, EIB Vice-President responsible for lending in Hungary, stated: “EIB funds will co-finance priority projects expected to have a beneficial impact on passenger demand for both commuter and long distance rail transport. These projects will increase railway capacity, comfort and safety, thereby contributing to the attractiveness of this sustainable mode of transport. The Bank’s support for the world-class laser research facility in Szeged, a flagship knowledge economy project, will increase the competitiveness of Hungary and create attractive, high quality job opportunities also in less developed areas of the country”.
Background information
The European Investment Bank is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
InnovFin financial products
Under Horizon 2020, the new EU research programme for 2014-20, the European Commission and the European Investment Bank Group (EIB and EIF) have launched a new generation of financial instruments and advisory services to help innovative firms access finance more easily. Over the next seven years, "InnovFin – EU Finance for Innovators" will offer a range of tailored products which will make available more than EUR 24bn of financing support for research and innovation (R&I) by small, medium-sized and large companies and the promoters of research infrastructures. This finance is expected to support up to EUR 48bn of final R&I investments.
InnovFin builds on the success of the Risk-Sharing Finance Facility developed under the seventh EU framework programme for research and technological development (FP7), which financed 114 R&I projects to the tune of EUR 11.3bn and in addition provided loan guarantees worth over EUR 1.4bn.
Backed by funds set aside under Horizon 2020 and by the EIB Group, InnovFin financial products support R&I activities, which by their nature are riskier and harder to assess than traditional investments, and therefore often face difficulties in accessing finance. All are demand-driven instruments, with no prior allocations between sectors, countries or regions. Firms and other entities located in EU Member States and Horizon 2020 Associated Countries will be eligible as final beneficiaries. These debt instruments will be complemented in the near future by a suite of equity instruments managed by the EIF.