European guarantees help Hungarian business like Agroloop grow, boosting innovation, employment, and digitalisation

Rajmond Percze always wanted to build a business that would be a sustainable role model. He never imagined it would be related to insects. At a conference in the Netherlands, he saw how insects efficiently turn biomass into valuable feed ingredients, and he seized on the opportunity to revolutionise farming practices in Hungary.

“I am a technology geek,” Percze says. Soon, his curiosity turned into a company he found with István Sándor Nagy and Marcell Lipták. Agroloop, founded in 2020,  uses the larvae of the black soldier fly to convert organic feed into valuable resources for the agricultural ecosystem. Agroloop transforms biomass into high-quality protein feed, oil, and fertiliser. This process has significantly lower ecological impact than average feedstock production, using 30 times less land, 40 times less water, and producing 40 times lower carbon emissions.

© Agroloop

Rajmond Percze

“Thanks to their protein composition, our feed ingredients can boost animal health and reduce mortality rates especially in livestock farming,” Percze says. “The fertiliser is organic and can be put into soil, boosting the microbiome and reversing its degradation.”

Backed by the European Union

Agroloop is one of the companies to benefit from a €370 million umbrella guarantee agreement between UniCredit Group and the European Investment Fund, signed in 2023. Backed by the European Commission’s InvestEU programme, the guarantee facility made it possible for UniCredit Group to boost debt investment in small and medium-sized businesses in Bulgaria, Croatia, the Czech Republic, Hungary, Romania, Slovakia, and Slovenia.

“This agreement allows us to support more innovative and green businesses, offering them competitive pricing and asking for less collateral,” says Anita Laurinyecz, director at UniCredit Bank Hungary. “We are able to reach out to more markets and more companies.”

For Rajmond and Agroloop, the new loan means more funding for technology development and production expansion.

“From the end of this year, we will be able to produce 3 000 tonnes of protein meal, 600 tonnes of oil, and 6 000 tonnes of fertiliser yearly,” says Percze. “But our vision extends beyond profitability, we want to be part of sustainable technological innovation and nurture talent in Hungary.”

Supporting Hungarian businesses  

In 2021, Hungary was home to 892 106 businesses, with 99.89% classified as small or medium-sized. The backbone of the Hungarian economy, they account for 75% of total employment and generate 61% of value added.

But many small and medium-sized enterprises struggle to obtain finance. That limits their growth and competitiveness. It also reduces economic opportunities for the local population, especially in lagging regions.

More challenges followed Russia's attack on Ukraine, which created economic shockwaves in the region and hit the Hungarian economy hard. Small and medium-sized enterprises faced higher energy costs, shortages of basic and raw materials, increased transport expenses, and severe supply disruptions.

>@Unicredit Hungary
© Unicredit Hungary

The gurantees aim to boost funding for the fields of sustainability, innovation, digitalisation, culture, creativity, education and social investments.

The guarantee agreement between the European Investment Fund and UniCredit Group aims to alleviate these challenges. It enables UniCredit to offer debt financing (including loans and leasing) at favourable conditions to around 2 500 small, medium-sized and mid-cap businesses across central Europe. It is expected to mobilise debt investment of around €1 billion in the real economy.

“This agreement will support Europe’s move towards a greener and more digitally competitive economy and the guarantees will boost access to finance for students, universities, micro companies and social enterprises,” says Kamil Pruchnik, a structured finance manager for InvestEU products at the European Investment Fund. “The implementation of this complex transaction benefits from a long-standing relationship between European Investment Fund and UniCredit Group, including the UniCredit Bank Hungary”.

Building Hungary’s future

Garzon Bútor Zrt specialises in the design of offices and public spaces in Hungary. Founded in 1939, the company “has amassed over 75 years of experience in industrial and interior design, as well as office, hotel, healthcare, museums projects, and professional woodworking and metalworking,” says Ivonn Nagy, its chief executive officer.

>@Garzon Bútor Zrt
© Garzon Bútor Zrt

Ivonn Nagy

This company is among the beneficiaries of an InnovFin guarantee, part of a €160 million initiative first launched in 2016 by the European Investment Fund and UniCredit Hungary. This programme aimed at boosting financing for innovative small and medium-sized enterprises and mid-caps in eight Central and Eastern European countries. The agreement draws support from Horizon 2020, the flagship EU research and innovation programme, and the European Fund for Strategic Investments.

The financing has been key to an expansion of the company’s business.

“Recently, we have successfully delivered over 250 projects yearly, worked with over 100 suppliers and a wide subcontractor basis,” Nagy says.