Economy 10 November 2022, 12:20pm

Hungary announces new factory rescue scheme

Portfolio

In order to avoid an economic recession and to maintain full employment, the Hungarian government has decided to launch a HUF 200 billion Factory Rescue Guarantee and Loan Programme, in addition to the already announced Factory Rescue Programme, as a further measure to help the economy, the Ministry of Economic Development said in a statement on Thursday. The two-part programme will be launched on 1 January 2023.

As one element of the programme, the Hungarian Development Bank Zrt. will launch a HUF 100 billion Factory Rescue Liquidity Guarantee Programme for large and medium-sized enterprises, in which Hungarian Development Bank (MFB) will provide a state guarantee for working capital loans, overdrafts and loans to finance operations.

On the one hand, this directly reduces the interest burden, and on the other hand, suppliers and service providers from the micro, small and medium-sized enterprise sector also gain access to funding through the financing of the actors concerned.

As another element of the programme, Eximbank Zrt. is launching a HUF 100 billion Factory Savings Investment Loan Programme, in which EXIM will provide state-subsidised, fixed-rate investment loans for the energy efficiency and renewable energy production investments of medium-sized and large domestic manufacturing companies. The maximum interest rate is 5% for HUF loans and 3.5% for euro loans.

Eximbank's investment loan complements the HUF 150 billion non-refundable support of the already announced Factory Rescue Programme, for which 168 companies have already registered. If the companies meet the conditions of the loan scheme, companies that are not eligible for the non-reimbursable aid can also benefit from the scheme. The maximum loan amount available may exceed HUF 2 billion, depending on the type of state aid received.