The European Investment Bank (EIB) is providing three loans totalling EUR 385 million in Hungary:

  • EUR 150 million to co-finance with EU Funds four priority regional development programmes;
  • EUR 85 million to support tangible and non-tangible investments in research, development and innovation in three major Hungary's universities and;
  • EUR 150 million to MOL (Hungarian Oil and Gas Company) to co-finance the construction of 205 km long natural gas transmission pipeline between Városföld and the Croatian-Hungarian border

The Bank also improves the access of Hungarian municipalities to long-term finance through a risk-sharing operation on municipal loans and bonds in the amount of HUF 13.5 billion (some EUR 49 million) provided in a form of a counterguarantee support to Garantiqa Hitelgarancia Zrt..

Mr. Anton Rop, EIB Vice-President responsible for lending in Central Europe, including Hungary, commented: "EIB funds, provided under favourable terms in difficult market conditions, will help to increase the competitiveness of Hungary through a support for projects accelerating the advancement of the country's regions and smaller municipalities, contribute to meet Hungary's commitment related to the development of the knowledge based economy by fostering university RDI activities as well as foster the security and diversification of energy resources".

The loan of EUR 150 million will partly finance the Hungarian national contribution of projects identified by four Regional Operational Programmes approved by the EU Commission within the National Strategic Reference Framework for 2007-13. The projects to be financed will support:

  • international competitiveness of the Central Hungary region;
  • economic position of the Central Transdanubia region;
  • establishing public service and economic infrastructure in the West Pannon region and
  • economic competitiveness of the North Hungary region

The loan of EUR 85 million will co-finance academic research programmes at the three major universities in Hungary: Corvinus University, Semmelweis University and Eötvös Loránd University, all three of them are located in Hungary's Capital Budapest. In addition, the EIB funds will also support rehabilitation of research and teaching facilities and the purchase of equipment needed for scientific research.

The Garantiqa Municipal Risk Sharing Facility will make the access to financing easier for local governments in Hungary, especially for the smaller ones which do not qualify for borrowing, so that they can financially support their own contribution to the implementation of municipal investment projects receiving EU fund grants. This is the second municipal risk sharing operation of the Bank in the form of a counterguarantee to Garantiqa. The first operation, which was signed in June 2007, has been successfully allocated by now in favour of small and medium-sized projects, mainly in the areas of education and urban regeneration.

The loan of EUR 150 million will co-finance the construction of 205 km long natural gas transmission pipeline between Városföld and the Croatian-Hungarian border. This project will create a bi-directional gas transmission between Hungary and Croatia. It covers also the construction of two compressor stations, a metering station at the border and a short small diameter branch line to Pecs. This will further integrate the EU gas market and provide gas transit capacity, along a priority Trans-European Energy axis, from Hungary to Croatia, Bosnia-Herzegovina and Italy, and in reverse mode from Croatia to Hungary.

In addition, the new facility will shorten the gas transit from Ukraine to Croatia, and thereby reduce the need for gas compression, which in turn yields less associated CO2 emissions. It will help to meet gas demand in Hungary and Croatia, part of which will enable to displace the use of more costly and polluting fuels in the residential and power sectors.

This loan supports the successful cooperation of the EIB with the MOL. In the past, the Bank had provided two loans to MOL amounting to EUR 275 million to finance refining and distribution and development of oil and gas system.

Note to editors:

The EIB, the European Union's bank, finances economically viable investment projects that contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. Since 1990, EIB lending in Hungary (including the loans signed today) has reached some EUR 13 billion.

Thanks to its Statute, the shareholders, the EU 27 Member States and its economic performance, the EIB is regularly granted by leading rating agencies by the best possible: AAA-rating. This allows the Bank to borrow funds on the capital markets on favourable terms. As the EIB is not profit driven, the Bank passes on this financial advantage via the loans that it grants to its clients and final beneficiaries.