MFB’s role in sustainable economic development in Hungary

Csaba Harsányi – Director, Brussels Representative Office MFB’s role in sustainable economic development in Hungary 9th of October 2019

Hungary in key numbers Population GDP GDP growth rate 2018 Inflation 2018 Unemployment rate MID19 Public debt to GDP EOY18 Corporate tax rate Personal income tax rate 10 million €155billion 4,9% 3,1% 3,4% 70,8% flat 9% flat 15% MFB is here 300,000 50% 75% 12% Number ofactive SME’s Share of SME’s in GDP Share of SME’s in employment SME financing to GDP

MFB: special role in Hungarian banking system Active relationship with the Hungarian banking system: 42 refinancing partners Loan, equity and guarantee in one hand Long-term, large loans for key projects Special solutions for SME’s and municipalities EU –Fund of Funds implementing body: ~EUR 3.4 billion

MFB group: source of solutions for many purposes EU funds • Loan and combined loan programmes • LoanFinancing • Equity • Guarantee • Payment technologies Key financial solutions and specialties under one roof MFB as Fund of Funds • Venture capital programmes Banking Group • & private fund managers • Property management • Student loan • Debt management

Targets & Funding Naturalpersons ESIF SMEs and MidCaps Municipalities Global RefinancingLoans (EIB, CEB, KfW, CDB, etc.) Largeenterprises Capital Markets (Bonds, SyndicatedLonas, etc.) Largeprojects Targetbeneficiaries and fundingsources of MFB loanproducts

MFB productsforsustainability Targetbeneficiaries: SMEs and Mid-Caps

MFB productsforsustainability Targetbeneficiaries: PrivateIndividuals and Municipalities

FI ProductRange in 2014-2020 1Economic Development and InnovationOperational Programme 2CentralCompetitive Hungary Operational Programme 3 Human Resources Development Oparational Programme

ELENA (European Local EnergyAssistance)experiences • For municipalities: • Before: difficult to reach the ELENA phase (projects structuring, financing, partnering, etc.) • During: project management, pre-financing, timing, procurement • After: bankable sustainability • For enterprises and natural persons • Programme level combination • Separate eligible preparation and implementation costs • Procurementquestions PDA programme of the European Commissiondeliveredthroughthe EIB

Somekey market gaps in hungary „Hungary’s public sector investment as a share of GDP is well above the EU average, while private sector’s investment is slightly below it. Of the six strategicpriority sectors the transport and energy, and ICT sectors received the largest share of investment resources. In contrast, the environment and resource efficiency and RDI sectors received just 2% each to the total investment in Hungary, thus showing potential for boosting investments in these sectors.” AsidentifiedbyPwCcommissionedby EIAH

Somekey market gaps in hungary Strategic transport and energy infrastructure • Transport infrastructure • Project identification: scoping of transport infrastructure due to limited strategic planning at present • Project preparation: preparing urban mobility, waterway projects, long-distance railway networks, support with preparation of PPPs • Financial structuring: financing schemes in transport (use of financial instruments) • Energy infrastructure • Project identification, preparation, and delivery: energy grid connection infrastructure Environment and resource efficiency • Project identification and preparation: waste management projects RDI • Financial structuring: developing business cases for newer financing schemes (venture, crowdfunding) • Capacity building: improve knowledge transfer between multinational companies, local companies and the national research system; advice on available funding EU funding sources and how to access them AsidentifiedbyPwCcommissionedby EIAH

Thanks for your sustainedattention!

MFB’s role in sustainable economic development in Hungary