Hungary: EIB lends EUR 300 million in support of the development of Budapest
29 December 2015
The European Investment Bank (EIB) has signed two loans with the Municipality of Budapest:
EUR 200 million, the first tranche of the approved loan of EUR 350 million, to finance priority investment schemes in the areas of public transport and road networks, and
EUR 100 million, representing the first part of the EIB loan of EUR 200 million, to support improvements in the fields of Budapest’s urban renewal and regeneration, energy efficiency increase and environmental protection.
Mr László Baranyay, EIB Vice-President, commented: “The EIBwill provide favourable funding conditions and liquidity for a long tenorsupporting priority investments under the Hungarian capital’s Integrated Urban Development Strategy.This is vital for the city’s continuing sustainable social and economic development, strengthening its competitiveness through the improvement of its attractiveness to investors, increasing the quality of life and upgrading the urban environment”.
The EIB loan of EUR 200 million provides an opportunity to finance the improvement of Budapest’s transport infrastructure, including the reconstruction of metro and suburban railway lines, tram and trolleybus infrastructure, road and bridge rehabilitation and rolling stock-related investments relevant for improving the quality of public transport services.
The loan of EUR 100 million makes possible to support the implementation of schemes in urban renewal and regeneration, energy efficiency and renewables, social urban regeneration, the environment including waste, water, wastewater, environment protection and remediation. It also addresses issues connected to the economic development of the city.
Both operations form part of the city’s Integrated Urban Development Strategy and are therefore in synergy and will contribute to the balanced and sustainable growth of Budapest.
The current loans represent a continuation of the very successful and fruitful cooperation between the EIB and the Municipality of Budapest. Previously, the EU bank has provided nine loans to the City of Budapest amounting to EUR 731.50 million to finance the rehabilitation and improvement of urban infrastructure in Hungary’s capital, which is home to some 1.7 million inhabitants representing 17% of Hungary’s population.
The EIB will support The Navigator Company, a major Portuguese industrial group and Europe’s leading pulp and paper manufacturer, with a €27.5 million loan for the construction and operation of a new biomass boiler at their integrated mill facility located in Figueira da Foz, a cohesion region in Portugal.
The EIB will finance around 40 projects in Barcelona that aim to support climate change mitigation and adaptation in the city. To this end, the EU bank will provide €95 million to promote urban regeneration, with a focus on the environment but also on social inclusion and job creation to boost the economic recovery in the wake of the COVID-19 crisis.
The EIB signed a second tranche worth €40 million for the rehabilitation of 180 kilometres of road along the five main routes in Montenegro. The loan from the EU bank is complemented by a €1.5 million technical assistance grant awarded under the Economic Resilience Initiative (ERI). It is the first ERI grant to be awarded to a project in the Western Balkans. The total EIB investment worth €80 million is expected to increase road safety and efficiency and facilitate faster economic recovery and regional trade.