ELECTRICITY NETWORK UPGRADE FOR INDUSTRIAL SITES

The project will strengthen and expand the transmission and distribution networks of the three project promoters.

Among other, the project will cater additional power requirements of two battery manufacturing facilities, located in the less developed regions of Hungary. In detail, one is located at an existing industrial site (Göd) and another at a greenfield industrial site (Iváncsa).

The operation is financing the reinforcement and expansion of electricity transmission and distribution networks, and catering for, inter alia, the additional power requirements of battery manufacturing facilities in two industrial sites in less developed regions of Hungary. These facilities are expected to generate positive externalities through the creation of new information and human capacity that can be used for the benefit of the broader economy.

The project also promotes economic and social cohesion by facilitating private sector investment in less developed regions, where such investment would otherwise be restricted two other market failures: incomplete markets and imperfect information. The same electricity infrastructure also serves the wider public, and, therefore, it is in line with EU and EIB policy objectives of climate action, and will generate positive externalities in the form of environmental and health benefits. These benefits would not be realised to the same extent without public intervention.

The expected economic rate of return is deemed "good" and the broader social benefits are deemed "fair".

The Promoters are experienced operators of electricity transmission and distribution networks with sound project management structures.

The EIB financing is structured to adequately address the Borrower's financing needs for the project, and will accelerate its implementation. 

The project comprises several electricity transmission and distribution schemes, with voltage levels ranging from 132 kV to 400 kV. None of the project schemes falls under Annex I of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (amended by EIA 2014/52/EU). Some of the schemes may fall under Annex II of EIA Directive 2011/92/EU (amended by 2014/52/EU), which requires the competent national authority to determine the need for an EIA. The environmental and social due diligence will include a review of relevant screening decisions and/or EIAs, and focus on the three promoters' capacity to implement the project in line with the EIB's socio-environmental standards and requirements.

The promoters have to ensure that contracts for the project implementation have been and shall be tendered in accordance with the applicable EU procurement legislation, Directives 2014/25/EU and 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.