BUDAPEST TRAM&TROLLEY ROLLING STOCK (FL20150006)

Promoter – Financial Intermediary

BKK BUDAPESTI KOZLEKEDESI KOZPONT ZRT

Location

• Hungary

Description

The EIB loan will finance the entire renewal of tram and trolley rolling stock and related infrastructure in Budapest. The project is part of Budapest's Sustainable Urban Mobility Plan that identified the fleet renewal as one of the core measures to improve the quality and attractiveness of public transport.

Additionality and Impact

The project is part of Budapest's Sustainable Urban Mobility Plan (Balázs Mór Plan) and consists mainly of the acquisition of trams and trolleybuses, along with some infrastructure interventions to facilitate the new vehicles operation. The renewal of tram and trolleybuses fleets is much needed to maintain and ultimately improve the quality of services offered (in terms of availability, reliability, safety and comfort) on the tram and trolley bus networks. This should strengthen overall the use of public transport and eventually reduce reliance on private modes, decreasing as such negative road traffic externalities (air pollution, noise, GHG emissions, congestion and road safety) while improving travel times and costs (accessibility and affordability), thereby addressing important market failures.

 

The project is expected to deliver economic benefits in terms of user travel time savings, reduction of vehicle operating costs, decreasing risk of accidents and improving environmental conditions, as a result of the expected modal shift from private modes to public transport system. In addition, the new vehicles should reduce the overall cost of operation due to lower maintenance costs and improved energy efficiency, which also translates into lower GHG emissions. Wider economic benefits are also expected, as the project will provide more affordable mobility solutions and facilitate accessibility to employment education and health services.

 

The project helps to fulfil a wide range of Sustainable Development Goals (SDGs) most notably climate change mitigation (viz. SDG 13) and urban infrastructure improvement (viz. SDGs 9 & 11) and is fully in line with EU and EIB objectives on sustainable cities and regions, climate action and environmental sustainability.

The project benefits from EIB's advantageous funding terms. EIB long-term financing and its flexibility regarding e.g. drawdown currency provides additional value for the Borrower in comparison to the terms of alternative financing options such as those typically available on the Bond market. 

Objectives

Renewing the public transport fleet will increase service and comfort levels in Budapest's public transport, thus encouraging the shift from private to public transport. The project will thus have a positive impact in terms of economic and environmental sustainability.

Comments

The project is a major allocation under the SPL "COHESION FUND FL IV (HU) (2015-0006)", targeting priority investments under the Transport and the Energy & Environment Operational Programmes and CEF in the EU programming period 2014-2020.

Sector(s)

• Transport - Transportation and storage

Proposed EIB finance (Approximate amount)

EUR 15 million

Total cost (Approximate amount)

EUR 164 million

Environmental aspects

None of the project components fall within the scope of Environmental Impact Assessment (EIA) Directive 2014/52/EC, amending Directive 2011/92/EC.

Procurement

As a public administration entity, the Promoter has followed EU public procurement rules. The contracts have been signed under a Framework Agreement, tendered in accordance with the applicable EU procurement legislation at that time (2004/18/EC as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU), with publication of tender notices in the EU Official Journal, as and where required.

Status

Approved - 24/11/2022