The European Investment Bank provides a EUR 30 million global loan to K&H Bank to finance small and medium-scale projects in Hungary.
The global loan will serve for the financing of small- and medium-scale projects promoted usually by private and public promoters in the field of environmental protection, energy savings, infrastructure - covering also health and education facilities, industry, services or tourism in Hungary. EIB long term funding will provide for up to 50% of the total project cost.
With this loan K&H Bank and final beneficiaries will benefit from the Municipal Infrastructure and Municipal Finance Facilities. These schemes are subsidized by EU grants under the Phare Programme and provide incentives to the final borrowers - mainly municipalities - as well as to K&H Bank to encourage lending in the municipal sector. The Municipal Infrastructure Facility is focused on investments of municipalities in the area of environment, transport, health and education in the Nyugat-Dunántúl border region. The Municipal Finance Facility promotes building, upgrading or refurbishing of small municipal infrastructure in the entire territory of Hungary.
EIB Global Loans have been developed as a successful tool in providing long-term EIB funds for financing smaller projects implemented by the SME sector or by municipalities under favourable conditions. They represent credit lines to financial intermediaries - EIB partner banks that on-lend EIB funds under their own management, at their own risk and own conditions but which should benefit from the favourable lending conditions of the EIB.
Since 1990, the EIB has lent a total of EUR 26 billion in Central and Eastern Europe to finance projects fostering European integration, approx. EUR 3.5 billion of this figure being provided through Global Loans. During the mentioned period the EIB has signed global loan facilities for a combined amount exceeding EUR 1 billion with 9 partner banks operating in Hungary.