The EIB is lending EUR 875 million for the construction of the fourth line of Budapest Metro that will contribute to the improvement of the heavily burdened city transport of Budapest with positive impacts on the environment and quality of life in the city.
A loan of EUR 194 million is also being provided for the construction and operation of the new Budapest Central Wastewater Treatment Plant at Csepel Island as part of a co-financing with the EU Cohesion Funds.
This represents a record lending of EUR 1.07 billion signed on a single day in a new EU Member State and it brings the total amount of EIB loans in Hungary to EUR 5.5 billion since 1990 of which EUR 3.4 billion have been signed since 2003. The recent growth in the Bank's operations reflects a high degree of support for Hungary's investment needs across a wide range of sectors.
The Bank's involvement with the Metro IV project stretches back several years. The loan for the Budapest Metro IV will be used for financing up to 75% of the construction of a new metro line of 10.5 km with fourteen stations, as well as the acquisition of 22 new five-car train sets to be run on the line. The new line will provide the first metro crossing of the Danube river between Kelenföld Railway Station in South Buda on the west side of the Danube and Bosnyak Square in the centre of Pest. Once operation commences on the line, it will decrease the pressure on the road bridges and tram crossings and should contribute to the smoother transport of approximately 175,000 inhabitants daily between Pest and South Buda. The new metro should also assist the rejuvenation of parts of the City and should further promote the role of public transport in Budapest. Operation on the first section between Kelenföld Railway Station and Keleti Railway Station is expected to start by end-2009, and operation for the second section between Keleti Railway Station and Bosnyak Square foreseen to begin by end-2010. In addition to EIB financing, this project may also receive support under the Cohesion and Structural Funds Programmes for the next EU Financial Perspectives covering the period 2007-2013.
The Budapest metro extension will contribute to the reduction of air pollution and vibrations, as well significantly decreasing the noise level in the neighbourhood of the new line. In addition, surface level transport will be reduced on Gellert Square, a world heritage site.
The project of the new Budapest Central Wastewater Treatment Plant involves the design, construction, operation and maintenance of the plant. It covers the construction of a new system for wastewater collection, treatment and sludge disposal for central Budapest. It will help to reduce pollution to the Danube and comply with EU Directives on wastewater treatment. About 50% of the municipal area and over 1 million people on both sides of the Danube will be connected. The plant will have a capacity to treat 300,000 m3/d of average dry weather flows to secondary treatment level. The new central wastewater treatment plant will be the largest of the four wastewater treatment plants within the urban conglomeration of Greater Budapest.
Mr. Wolfgang Roth, EIB Vice-President, commented: I am particularly happy that the important Metro IV project is now going ahead. The new metro line will significantly improve the urban transport network in Budapest with positive consequences for the quality of life in the Hungarian capital from an environmental point of view. In addition, it will significantly reduce daily commuting times for the city's residents. I am also pleased that the other EIB loan signed today for the City of Budapest will help to improve the environment in the City and the Danube generally and contribute to implementation of EU environmental standards.
Since 1990, EIB lending in Hungary has exceeded EUR 5.5 billion to finance investment projects fostering the integration of the country into the EU and loan amounts and numbers in the country continue to rise. In 2000 EIB annual lending in the region stood at EUR 240 million, while in 2004 it had increased to EUR 805 million. So far in 2005, EIB loans in Hungary have exceeded EUR 1.3 billion.
The EIB, the European Union's financing institution, funds projects that contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. Outside the Union the EIB implements the financial components of agreements concluded under European development aid and cooperation policies.
Since 1990, the EIB has lent a total of some EUR 30 billion in Central and Eastern Europe. The EIB is the most important external source of finance for Central and Eastern Europe.