EIB Group commits €490 million in Hungary in 2023 and continues to support green investments

• Insights from the EIB Investment Survey reflect cautious optimism in Hungary’s investment climate, with primary concerns including uncertainty and rising energy costs.
• The EIB Group allocated €288 million for climate investments, driving the country's green transition.
• Out of the total €490 million in new financing, over three-quarters was signed for projects supporting economic and social cohesion in the country.

The EIB’s Investment Survey published today polls more than 13 000 companies globally about the investment climate, focusing on employment, digital transformation, and climate issues. Against a backdrop of modest GDP growth and tight monetary conditions, Hungarian firms were cautiously optimistic about the investment outlook.

The main sources of concern are economic uncertainty, the increase in energy costs, and the availability of skilled staff. Hungarian businesses said they had to face several challenges, with 97% of firms grappling with increased energy costs. Some 88% of the businesses polled are proactively adopting strategies focused on energy savings and efficiency, aligning with the EIB’s commitment to sustainable practices and economic resilience.

Despite weather events impacting two-thirds of Hungarian businesses, there is room for improvement in climate resilience measures. Only 20% of Hungarian firms have taken steps to build resilience against physical risks caused by climate change, falling short of the EU average of 36%. In addition, only 11% of firms in the country have invested in solutions to reduce exposure to physical risks, while a mere 7% have a dedicated climate adaptation strategy.

The share of Hungarian firms seeing the transition to stricter climate standards and regulations as a risk is almost four times higher than the proportion that consider it an opportunity (44% and 12%, respectively). On the other hand, nine out of ten Hungarian companies are actively taking measures to reduce CO2 emissions, mirroring the EU average of 89%. Their primary actions include investing in energy efficiency (77%), minimising waste through recycling (62%), and adopting renewable energy generation (60%).

“Our annual investment survey serves as an important tool for the financial sector and public authorities. By comparing national results to EU averages, other Member States and a selection of companies in the United States, we can gain valuable insights into the needs and opportunities of various firms. Our analysis reveals that Hungarian companies have demonstrated resilience during the energy crisis, and their transition towards sustainable practices is underway. The EIB Group is committed to supporting Hungarian firms through financing for renewable energy, sustainable solutions and energy efficiency, ensuring their success in moving towards a greener and environmentally friendly future,” said EIB Vice-President Teresa Czerwińska.

EIB Group annual results

The European Investment Bank Group (EIB Group), comprising the European Investment Bank (EIB) and its subsidiary, the European Investment Fund (EIF), supported Hungary’s economy with €490 million in new loans and guarantee commitments in 2023.

Last year, the EIB’s engagement in the country included financing for agriculture, industry and infrastructure, and support for small and medium-sized enterprises (SMEs) and mid-caps. Nearly two-thirds of total financing signed across these sectors supported climate action and environmental sustainability.

The EU climate bank signed an agreement with the Hungarian Development Bank, committing €100 million to support energy efficiency investments and renewable energy projects. This strategic collaboration reinforces the EIB’s commitment to addressing environmental challenges and promoting sustainable initiatives. In addition, the EIB extended support for the energy-efficient renovation of residential buildings and the implementation of domestic renewable energy systems. The operation, carried out under Hungary’s Home Renovation Programme, focuses on promoting energy-saving investments in homes. The additional €50 million funding supplements a previous EIB loan and facilitates various types of energy-efficient renovations and upgrades. The Bank provided backing for a €40 million loan to SG Equipment Finance Hungary (SGEF HU) to offer new financing for SMEs and mid-caps, primarily engaged in the industry and services sector, with a focus on green investments.

A €200 million framework loan agreement, co-financing the Hungarian Rural Development Programme managed by the Ministry of Agriculture, is set to boost sustainable development in farming, food production, and rural areas. Supporting SMEs in the agriculture sector, the project eliminates the financial constraints usually faced by these businesses. Furthermore, it promotes rural development with diverse investments, including basic infrastructure and services, contributing to the protection of natural resources. The green loan underscores the EIB’s continued efforts to drive positive change, contribute to rural development, and enhance sustainable living spaces.

The EIB provided backing for rooftop photovoltaic installations in Hungary to accelerate the energy transition, strengthen power supply security, and boost climate action. The contribution of €48 million, facilitated through two operations, significantly bolsters the country’s commitment to investing in renewable energy.

EIB Advisory Services in Hungary

The EIB Advisory Services continued to provide valuable advisory and capacity building support in Hungary. JASPERS alone has attracted over €22.1 billion in investments since 2006. In total, JASPERS has worked on 134 assignments, primarily in the transport sector, circular economy, research and innovation, water, and more.

This article was first published on 5 February by the European Investment Bank.