Hungary Energy Saving Credit Fund/German Coal Aid Fund

 Name

Hungary: Energy Saving Credit Fund/German Coal Aid Fund

Status

Active

Funding Mechanism

Duration

1991- revolving fund; end not defined

Objectives

To improve energy efficiency in energy production, transformation, transport, and end-use

Sponsors

Established in 1991 by the Ministry of Economic Affairs (MoEA) with the proceeds of US $18 Million from the sale of donate d German hard coal- German Coal Fund

Eligible Sectors

Industrial firms, municipalities, and district heating companies

Eligible Projects/Technologies

Renovation of energy transformation, heating, lighting systems, energy efficient industrial technologies, renewables, energy saving measures in district heating systems

Fund Endowment

German Coal Aid -DM 50 Million (in 1991DM, US$ 18 Million)

Terms

-Funding Instruments

Loans

-Interest Rates

Interest Rate equals 1/3 (till 2002: 50%) of the prevailing basic interest rate published by the Hungarian National Bank

-Payback

3-4 years with a maximum length of 6 years (including 2 years of grace period) and implementation period maximum 2 years

-Size

Average: $80,000 – Maximum: $0.3 million USD

-Collateral

Yes

-Share of loan in project cost

Maximum 80%

-Loan criteria

Credit-worthiness of total cost saving at least 50% are from energy saving. Projects need to achieve minimum energy savings to eligible (>75 GJ/million HUF annually (till 2002: >100GJ per million HUF annually) and 50% of all savings must be energy cost savings).

Comments

The government of the Republic of Germany offered a 50 million DEM aid package to Hungary for purchasing coal in 1991. Following the purchase and subsequent sale of coal, 60% of the generated income became a financial source entitled “German Coal Aid.” The fund has become independent from any current or future resource, grant, loan providing institutions and can supply both SMEs as well as larger projects.

Sources

The Energy Centre Hungary

GEF

IEA

World Bank

Contact Information