ENERGY EFFICIENCY HOME RENOVATION - GREEN LOAN

Promoter – Financial Intermediary

REPUBLIC OF HUNGARY

Location

• Hungary

Description

Financing energy efficiency refurbishment of residential buildings and domestic renewable energy systems under the Home Renovation Programme of Hungary.

Additionality and Impact

The project will stimulate energy efficiency driven retrofit of residential properties in Hungary. This will reduce energy demand overall and improve both the reliability and security of supply in the country. In parallel, the project will contribute to reducing greenhouse gases and alleviating air pollution. Energy efficiency addresses multiple market failures, such as environmental externalities and imperfect information. In addition, the project will increase the share of distributed renewable power in Hungary thus further improving the reliability and security of supply, and reducing greenhouse gases and alleviating air pollution. By supporting investment in domestic solar PV systems, the project will make a valuable contribution to adding power system flexibility and to decentralising the energy supply. EIB's potential technical support could help the Promoter to reliably quantify the impacts of the project in terms of energy and CO2 savings and would significantly improve its monitoring and reporting aspects. 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.

Objectives

The operation contributes to the deployment of energy efficiency and renewable energy in the existing housing stock in Hungary. As such, it supports the relevant national and EU targets in the areas of energy efficiency and renewable energy, and would count 100% towards the Climate Action objectives.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply
• Industry - Construction

Proposed EIB finance (Approximate amount)

EUR 500 million

Total cost (Approximate amount)

EUR 1000 million

Environmental aspects

The project relates to investments in energy efficiency and building integrated renewable energy, and will be implemented in existing residential buildings without changing the already authorised scope and would therefore not require an environmental impact assessment (EIA) under the EIA Directive 2014/52/EU amending the EIA Directive 2011/92/EU. The Bank's services will nevertheless review during the project appraisal whether any of the investments fall under Annex II of the EIA Directive, as well as any other environmental aspects. The renovation works to be carried out in built-up urban areas are deemed to have minor negative environmental and social impacts during the renovation process and these impacts are expected to be mitigated by proper works management. If applicable, works related to asbestos must be carried out in accordance with the existing regulations for asbestos removal and disposal. The project will contribute to energy efficiency and thus to the reduction of CO2 emissions. The sub-projects supported by this operation qualify as climate action as they exclusively pertain to energy efficiency and renewable energy measures in the building stock in the EU. The operation concerns investments and interventions in the homes of private individuals in Hungary and as such is not expected to give rise to negative social issues.

Procurement

The Bank will require the Promoter to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/24/EU, as well as Directive 89/665/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.

Status

Signed - 17/11/2021