RAKOS HATVAN RAILWAY LINE (FL20150006)

The loan will finance the upgrade of the railway line n. 80 between Budapest Keleti station and Hatvan in the north-east (statistical regions: Budapest HU11, Pest HU12 and Northern Hungary HU31) over a total length of 55.1 km. It also includes the installation of level 2 European Train Control System (ETCS). The project is part of a larger programme concerning the railway line Budapest - Hatvan - Miskolc - Nyiregyhaza - Zahony (Ukraine border), which is the south-western branch of the Mediterranean Core Network Corridor on Hungarian territory.

The aim is to increase the quality of rail services in Hungary and support the modal shift from road to rail. Being located on the Mediterranean Corridor, part of the Trans-European Transport Network as per EU Regulation 1316/2013, the project enhances sustainable transport in line with the EU objectives and also contributes towards EIB's climate action.

The project is expected to consist of upgrade of rail infrastructure on the Rakos - Hatvan line. The infrastructure works will contribute to reducing the journey time, promoting more efficient operation, reducing maintenance costs, lowering energy consumption and increasing the level of comfort for passengers. Indirectly, by improving services, the project will help railways compete with other modes, particularly private vehicles and air, so as to maintain or improve its modal share. Shifting passenger flows from other modes to rail may result in reduced vehicle operation costs, safety and environmental benefits.

EIB long-term financing and its flexibility regarding e.g. drawdown currency provides additional value for the Promoter in comparison to the terms of alternative financing options such as those typically available on the Bond market.

The promoter's environmental management capacity to apply the relevant EU Directives was verified, particularly the EU environmental impact assessment (EIA) Directive 2011/92/EU amended by 2014/52/EU, EU Strategic Environmental Assessment (SEA) Directive 2001/42/EC, EU Habitats Directive 92/43/EEC and EU Birds Directive 2009/147/EC. The project falls within the scope of Annex I of the EIA. The EIA report was completed on 07/12/2012 and submitted to the competent authority on 07/05/2012, who issued the development consent on 12/12/2013 (decision reference: KTVF: 739-22/2013). Following modifications of the project alignment, the EIA report was modified and re-submitted to the competent authority on 29/12/2017 who issued the development consent for the modified project on 27/02/2018. The environmental permit (EIA) was extended on 30.07.2018. The project has no significant impacts on protected areas and species, in accordance with the Habitats Directive (92/43/EEC) and Birds Directive (2009/147/EC).

The Bank requires the promoter to ensure that contracts for the implementation of the project have been/will be tendered in accordance with the relevant applicable EU procurement legislation: Directive 2014/25/EU, as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.