- The European Investment Bank invested €880 million to boost energy efficiency of Hungarian homes, faster recovery of SMEs and mid-caps from the COVID-19 pandemic and the Hungarian public sector’s response to the pandemic.
- The European Investment Fund, a part of the European Investment Bank Group, provided €11 million in equity and guarantees.
- EIB Group supported faster COVID-19 recovery of the Hungarian economy and boosted Hungary’s healthcare system response to COVID-19 with close to €701 million in 2021.
The European Investment Bank Group, consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), increased its investments in Hungary in 2021 and provided €891 million to the local economy, a record volume of investment in the past five years. The EIB increased the volume of its operations in Hungary for the fifth consecutive year with lending of €880 million.
The EIF invested €11 million in the local economy — €5 million in equity and €6 million in guarantees to local private and public banks. Since 2017, the EIF has invested some €306.5 million — in equity (€120.5 million), guarantees (€185.4 million) and inclusive finance (€0.6 million).
The EIB Group’s activities in Hungary channelled €701 million for faster recovery of the Hungarian economy and fuelled the public sector’s response to COVID-19.
EIB Vice-President Teresa Czerwinska, who is in charge of operations in Hungary, said: “The EIB Group has again proven that we are a reliable partner for Hungary even in the most difficult of times. Our record high results for 2021 are proof of our commitment to the social and economic development of Hungary. They also testify to our determination to ensure this development is long-term, sustainable, green and inclusive. I am particularly proud of our contribution to COVID-19 recovery in the country. We have provided €701 million to sustain Hungarian businesses and healthcare system during these difficult times. I would like to thank our partners in the Government and in the public and private sectors for the opportunity to help make Hungary even stronger.”
Support for an energy independent, efficient and green Hungary
In 2021 the EIB provided €300 million to the Government of Hungary to co-finance the national Home Renovation Programme set up to improve the energy efficiency of homes. The operation supported a reduction of energy demand and improved both the reliability and security of supply in the country. In parallel, financing will help reduce greenhouse gases and alleviate air pollution. Energy efficiency investment will generate local and regional economic activity and thus increase employment.
This is the first loan signed in Central and South-Eastern Europe in line with the green loan principles established by the Loan Market Association strengthening the EIB’s credentials as the EU climate bank. The loan will help accelerate Hungary’s green transformation into a carbon-neutral economy, as well as plans under the European Green Deal to transform the European Union into a carbon-neutral economy by 2050. The EIB financing will also help achieve the goals set in the European Commission’s Renovation Wave for Europe initiative.
Support for a modern, competitive workforce in Hungary
The EIB invested in seven operations in the country. The EU bank provided €150 million to Diákhitel to ensure Hungarian students have easier access to student loans; the loan also supports post-secondary vocational education, training programmes and adult learning programmes and, in turn, the development of a modern, competent and competitive workforce for the Hungarian economy. This is the sixth such operation in support of Diákhitel to which the EIB has provided €687 million in total over the past few years.
EIB support for faster COVID-19 recovery of Hungary
As part of the EIB’s support for Hungary in mitigating the effects of the COVID-19 pandemic, the EIB supported Hungary’s public sector to the tune of €146 million, boosting the effectiveness of its response to the pandemic by financing the acquisition of vital equipment and materials.
The EIB signed a €50 million operation with UniCredit Bank to unlock new sources of financing for Hungarian SMEs struggling with the effects of the COVID-19 pandemic. The Bank has assisted the private sector in the modernisation and digitalisation of the production facilities – including €30m loan to the Lasselberger Ceramics company.
Over €10 billion invested in Hungary in the past decade
Over the past ten years, the EIB has invested some €10.4 billion in Hungary, the majority (€2.31 billion) in credit lines for local SMEs and mid-caps. Between 2011 and 2021, the EIB invested €1.76 billion in development of the country’s transport sector and a further €1.22 billion in the national healthcare sector. An additional €1.11 billion was invested in the country’s education sector, €976.7 million in the services sector, €800 million in agriculture, €776 million in the energy sector, €605 million in industry and €571 million in water and wastewater management. Other sectors of the Hungarian economy have also benefited, with waste management, telecoms, composite infrastructure and urban development receiving over €1.05 billion in long-term funding from the EIB.
EIB Advisory Services supports Hungary in attracting new investments for faster, green and sustainable development
In 2021, the EIB Advisory Services continued to provide valuable advisory and capacity-building support to the Government of Hungary and the country’s public and private sectors. In 2021, the EIB Advisory Services took on seven new assignments in the country, completed six and reported 29 active assignments.
The EIB advisory services active in the country are mainly provided through Joint Assistance to Support Projects in European Regions (JASPERS), and include European Local Energy Assistance (ELENA), the EIB Advisory Hub, and the Invest EU Advisory Hub. These services helped the promoters develop projects in areas such as climate and environment, energy efficiency, infrastructure, sustainable urban development, and agriculture.
Valuable support for project development from the EIB Advisory Hub, JASPERS and ELENA
Since 2006, the JASPERS Advisory Service alone has supported the preparation of investment projects worth more than €14.4 billion. JASPERS, set up in partnership with the European Commission, helps cities and regions absorb EU funds through top-quality projects.
ELENA has worked on two assignments in Hungary to promote the introduction of energy efficiency measures; the projects supported by ELENA are expected to attract in excess of €230 million. At the same time, the EIB Advisory Hub supported the European Commission’s Digital Innovation and Scale-up Initiative (DISC) by undertaking a market study in Hungary to assess the level of digitalisation in the country. The Advisory Hub also supported the Government of Hungary in developing its Circular Economy Package.