• Two projects receive support from the Investment Plan for Europe: the modernisation of the power transmission network and financing for small and medium-sized businesses 
  • Two other projects are set to finance key investments in infrastructure and a student loan scheme for higher education
  • The EIB will also support the Hungarian Development Bank (MFB) in setting up an advisory unit for infrastructure and SMEs  

The European Investment Bank (EIB) is showing its support for the Hungarian economy and for cohesion projects in Central and Eastern Europe. In Budapest today, EIB Vice-President Vázil Hudák signed four different loan agreements for a total amount of EUR 400 million and one advisory agreement. He also spoke at the Budapest Economic Forum.

Two of the four agreements are guaranteed by the European Fund for Strategic Investments (EFSI), the financial pillar of the Investment Plan for Europe (or “Juncker Plan”). With backing from the Juncker Plan's EU budget guarantee, MVM Hungarian Electricity Private Limited Company (MVM), the major player in the Hungarian power and gas sectors, will receive a EUR 100 million loan from the EIB to finance its subsidiary MAVIR to modernise and develop its power transmission network, including interconnectors with Slovakia. Budapest Bank, one of the eight largest banks by assets in Hungary, will receive a EUR 25 million loan on favourable conditions to increase its lending volumes to Hungarian small and medium-sized enterprises (SMEs).

The two other agreements include a large framework loan of EUR 225 million (Cohesion Fund Framework Loan IV), aimed at financing investments in water, including flood prevention, waste, energy efficiency, road modernisation and railways, and a EUR 50 million loan to Diakhitel, a state-owned entity responsible for operating Hungary’s higher education student loan scheme.

A fifth agreement is being signed with the Hungarian Development Bank (MFB). Its goal is to help MFB to establish a dedicated advisory unit that will support Hungarian clients when preparing and implementing investment plans. This agreement is backed by the European Investment Advisory Hub (EIAH), the advisory pillar of the Investment Plan for Europe (or “Juncker Plan”).

The loans signed today demonstrate the EIB’s commitment to cohesion projects in Hungary”, said Vázil Hudák, EIB Vice-President. He is responsible for operations in Hungary and oversees cohesion and advisory programmes at the EU bank. “We are co-financing projects expected to have a positive impact on society and the economy, thanks to better energy generation and efficiency, improved mobility, environmental safety and education. We are also pleased to sign the first direct EFSI corporate loan with MVM and the first EFSI loan with a financial intermediary in Hungary with Budapest Bank, facilitating access to finance for innovative small and medium enterprises. All this will help Hungary to close the gaps between better off and less advanced regions”.

European Commissioner for Regional Policy Corina Crețu said: "These agreements will have a positive impact on local economic development in Hungary. They show that the Juncker Plan can play its role in bringing more cohesion to our Union fully; it helps Member States and regions grow faster, and grow closer. The two EFSI deals will modernise Hungary's power system, for the direct benefit of the Hungarian people, and will support Hungarian small businesses in need of a financial boost, including in rural areas. In addition, a new EIB loan signed today will help more Cohesion Policy projects in infrastructure see the light of day, and that is great news for long-term regional development in the country."

More information about the projects:


This is the first direct EFSI corporate project in Hungary. MVM (MVM Hungarian Electricity Private Limited Company), the state-owned company and major player in the Hungarian power and gas sectors, will receive a EUR 100 million loan. MVM will pass on the EIB funds to its subsidiary MAVIR Hungarian Independent Transmission Operator Company Ltd. The project financed is a multiyear investment programme comprising the installation of the Hungarian sections of two new 400-Kilovolt overhead lines interconnecting Hungary with Slovakia, the construction of four new substations, the refurbishment and extension of existing substations, and the reconstruction of overhead lines. This will improve the safety and reliability of the Hungarian system, with positive consequences for Central and Eastern Europe in a context of increasing regional transit and interconnection capacity. Moreover, the EIB loan guaranteed under EFSI will enhance the finance structure of the company and therefore has the potential to attract further investors, which is one of the goals of the Juncker Plan.  


The intermediated loan of EUR 25 million is the first operation between Budapest Bank and the EIB and the EIB’s first EFSI operation with a financial intermediary in Hungary. The loan will enable Budapest Bank to diversify its funding sources and to enhance the bank’s support of SMEs in Hungary in various sectors and across the country, thanks to a strong client network in rural areas. The bank is committed to providing financing to SMEs for at least twice the amount of the EIB loan.


This is the second tranche of the structured programme loan of EUR 225 million (Cohesion Fund IV) that primarily supports large infrastructure projects enabling Hungary to reach its targets under the 2014-2020 programming period in terms of growth and employment, climate action and energy independence. The overall programme includes investments in water, including flood prevention, waste, energy efficiency, renewable energy and distribution. It also covers transport projects, improvements to roads in less developed areas and railways throughout Hungary. The beneficiaries of the programme loan are public and private entities such as central and local government institutions (ministries, municipalities), state or municipally owned enterprises, private companies and non-profit organisations.


Diakhitel (Diakhitel Kozpont Zrt.) is a state-owned entity responsible for operating Hungary’s higher education student loan scheme. The purpose of the EIB’s EUR 50 million loan is to provide financing of up to 50% of the total amount of student loans disbursed and expected to be disbursed by the entity between 2017 and 2021. The student loans finance the tuition fees and living costs of the students and aim at facilitating access for local and foreign students to the Hungarian higher education system.


Finally, the EIB signed an agreement to help the Hungarian Development Bank (MFB) establish a dedicated advisory unit within its structure. The aim of the new unit will be to support different clients in Hungary in preparing and implementing investment projects in the areas of transport infrastructure as well as SMEs and mid-caps. This funding agreement is one of the first signed by the EIB, in the context of the European Investment Advisory Hub, to enhance the capacity of National Promotional Banks to deliver advisory services at a local level.