Raiffeisen Bank and EBRD co-operate to boost energy savings in Hungary

 

• €25 million credit line to improve energy efficiency in municipal infrastructure

• Proceeds of credit line to be used for on-lending to municipalities and municipal companies in Hungary

• Raiffeisen Bank is Hungary's second-largest provider of municipal finance

Raiffeisen Bank Zrt. (Hungary) will receive a €25 million credit line from the European Bank for Reconstruction and Development (EBRD) to finance energy saving investments in the Hungarian municipal sector.

The proceeds of the credit line will be used for on-lending to Hungarian municipalities, municipal companies, as well as energy saving companies that provide services to municipalities in order to support the upgrade of the energy efficiency of municipal infrastructure. Supported infrastructure improvements will include the rehabilitation of heating and power distribution systems, the replacement of outdated boilers and the improvement of buildings' thermal insulation. This facility will help Hungarian municipalities reduce energy consumption by up to 150 GWh per year, comparable to the amount of electricity consumed in a year by the households of Gyor, Hungary’s sixth-largest town with a population of 128,000.

General awareness of the benefits of energy efficiency has increased in recent years, but local municipalities still rely almost exclusively on government funds and EU grants for modernizing their infrastructure. With this EBRD support, Raiffeisen Bank will be able to increase the availability of funding for energy conservation projects for municipalities and energy saving companies in Hungary, thus helping to improve this sector's energy efficiency.

A fully-owned subsidiary of Raiffeisen International Bank-Holding AG, Raiffeisen Bank is Hungary's fifth-largest bank by assets and the country's second-largest provider of municipal finance.

The credit line is part of a European Union-EBRD programme to promote medium and long-term funding for energy efficiency improvements in the municipal sector through commercial partner banks.

To enhance the effectiveness of investments, the EBRD credit line is complemented by grant funds from the European Commission, which will be used to help the municipalities assess energy saving potential and financial feasibility of infrastructure rehabilitation projects, as well as to provide investment incentives to borrowers who successfully implement projects. The incentives will be based on estimated level of energy savings and will amount to up to 20 per cent of the sub-loans.

Since the beginning of its operation in Hungary, the EBRD has invested over €1.9 billion across more than 100 projects.

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Raiffeisen Bank Zrt. is the Hungarian banking subsidiary of Raiffeisen International Bank-Holding AG. Since its start of operations in 1987, Raiffeisen Bank has become one of the leading financial institutions in Hungary, offering its more than 620,000 customers a full range of financial services through over 160 branches.

Raiffeisen International operates one of the largest banking networks in CEE, covering 17 markets across the region through subsidiary banks, leasing companies and a range of other financial service providers. The group's nearly 62,000 employees service 14.9 million customers via more than 3,200 business outlets. Raiffeisen International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (RZB), which owns about 70 per cent of the common stock. The remainder is in free float, with the shares listed on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian Raiffeisen Banking Group, the country's largest banking group.