MVM TRANSMISSION NETWORK UPGRADE

The project comprises the extension and reinforcement of the electricity transmission network in Hungary, over the period 2021-2025.

The project is expected to support the efficient operation of the electricity transmission network in Hungary, to enable the Promoter to maintain the reliability and quality of the electricity supply, and to contribute to the integration of renewable energy sources (RES) generation.

The programme comprises the refurbishment and reinforcement of the electricity transmission grid in Hungary. The programme will help the promoter maintain the quality of electricity supply and contribute to the safe and efficient operation of the transmission network. In line with Hungary's National Energy Strategy and National Energy and Climate Plan, it will enable the integration of RES generation by increasing the capacity and flexibility of the network, thus contributing to long-term decarbonisation targets. In line with the EU Taxonomy, electricity grid infrastructure in Europe is considered eligible for climate change mitigation. The project is expected to deliver good economic benefits and very good social benefits. The promoter is experienced in works of this nature and has a sound project management system in place. The EIB provides a substantial tenor extension to the Borrower. Besides, EIB offers flexible drawdown terms, a long availability period and a disbursement in both EUR and HUF. Such favourable terms cannot be obtained from commercial banks. The EIB is an anchor lender of MVM and the new loan will send a signalling effect concerning the financial soundness of the company and the project.

The project comprises electricity transmission schemes (overhead lines, new substations and works in existing substations), some of which will fall under Annex I of the Environmental Impact Assessment (EIA) Directive and will have to undergo an obligatory environmental impact assessment, while most of the remaining schemes will fall under Annex II, thus requiring the competent national authority to determine the need for an EIA. The main impacts that can typically be expected for a project of this nature relate to visual impact, vegetation clearance, electromagnetic fields, noise nuisance, impact on flying vertebrates and disturbance during construction.

The Bank will require that the Promoter ensures that contracts for the implementation of the Programme schemes have been tendered in accordance with the relevant applicable EU procurement legislation, Directives 2014/25/EU, where applicable, as well as Directive 92/13/EEC and Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with the publication of tender notices in the Official Journal of the European Union, as and where required.