European loan to Hungary's MVM

The European Investment Bank (EIB) is lending EUR 100 million to state-owned MVM Hungarian Electricity Ltd to finance the implementation of its investment program for the period 2013-2018. The EIB loan will facilitate the reinforcement and extension of the Hungarian electricity transmission network and the reconstruction of underground gas storage facilities.

The part of the project dealing with electricity transmission covers reconstruction and development works on substations and the installation of the Hungarian sections of some 40 km of two new 400 kV overhead high voltage lines interconnecting Hungary and Slovakia. The loan will also finance the replacement of optical ground wires on high voltage lines and the conversion of a 750 kV line to 400 kV, EIB said in a press release.

The investments to be carried out by MVM by 2018 are planned to absorb HUF 53 billion (currently about EUR 170 bn). These are aimed at increasing MVM Group’s role in ensuring supply security in the region.

In the area of gas infrastructure, the EIB funds will support the reconstruction of injection and measuring systems, the installation of a new gas cooler and various well reconstruction works at four existing underground gas storage facilities in order to maintain and increase their long-term technical availability.

"The EIB loan will help to extend, upgrade and make more reliable the vital parts of energy infrastructure, be it the high voltage lines or gas storage equipment," the EIB Vice-President responsible for lending in Hungary, László Baranyay said.

"Ensuring the proper performance of these facilities and adapting them to the increasing demand are important for strengthening the competitiveness of the Hungarian economy and creating new job opportunities," he added.

According to the EUB press release, "this loan builds on the excellent cooperation between the EIB and MVM. In 2010, the Bank provided a loan to MVM to finance the capacity increase and extension of Hungary’s high-voltage transmission grid."