MIGA Supports Hungary’s Exports
WASHINGTON, September 12, 2023 —The Multilateral Investment Guarantee Agency of the World Bank (MIGA) has issued guarantees covering a loan of €300 million to Magyar Export-Import Bank Zártkörűen Működő Részvénytársaság (Hungary Exim), a state-owned enterprise that provides affordable climate financing to Hungary’s domestic exporters. Hungary Exim is an export credit agency that facilitates the sale of Hungarian goods and services in foreign markets.
The MIGA guarantees of €386 million were issued to ING Bank for a period of 12 years to cover the loan to Hungary Exim against non-honoring of a sovereign financial obligation. The MIGA-guaranteed loan, which includes the €300 million loan and other financing-related costs, will be utilized to lend to Hungarian companies and SMEs, which will increase their access to climate finance for export-related businesses, ultimately boosting their resilience and competitiveness.
Hungary Exim has set a target to disburse €300 million of financing toward climate finance projects by the end of 2028. This is MIGA’s third transaction with the agency, which plays an important financing role in the government’s effort to encourage sustainable investments by Hungarian corporates and SMEs. This is also MIGA’s first project with Hungary Exim that has a strong emphasis on climate finance.
“MIGA is proud to support investments in Hungary’s export business, which serves as a lifeline to the country’s economic engine,” said Hiroshi Matano, MIGA Executive Vice President. “Through MIGA guarantees, Hungary Exim will be able to make sustainable investments while helping to reduce the country’s carbon footprint.”
As Hungary was recovering from the COVID-19 pandemic, spillovers from Russia’s invasion of Ukraine caused spikes in energy prices and a significant devaluation of its currency against the U.S. dollar and euro. These factors had a significant impact on its economy and weakened the investment capacity of Hungarian companies. Exports represented 90.4% of its GDP in 2022 and as Hungary is a carbon-intensive economy in the EU, export-oriented companies have the pressure to improve their supply chain sustainability and traceability while meeting EU climate targets.
“ING is proud to facilitate Hungary’s green transition by providing this loan for EXIM Hungary with the support of MIGA. The financial sector’s role in this transformation is vital”, said Michiel de Vries, Global Head of Structured Export Finance, ING Bank.
“Together with MIGA we are contributing to EXIM Hungary’s mission to provide climate finance lending to SMEs and large corporations in Hungary,” added Tibor Bodor, Country Manager and CEO of ING Bank Hungary.
Hungary Exim is one of the first financial institutions in the country with a dedicated green finance program. High energy costs and price increases by suppliers are the two major obstacles for business activities in the country. The MIGA-guaranteed loan will ensure that Hungarian firms have access to long-term affordable financing, effectively reducing the financing gap.
"EXIM Hungary is striving to provide a wide range of assistance to domestic companies, with the aim of promoting the mainstreaming of climate risk management and climate-smart investments in the Hungarian corporate sector. With this €300 million loan, we hope to contribute significantly to putting the country's economic development on a more sustainable footing," said Mihály Hoffmann, Deputy CEO for Finance of EXIM Hungary.
The MIGA guarantee is helping to mobilize private lending to Hungary in its effort to stimulate the green transition, maximize finance for development, and mitigate the adverse impacts of Russia’s invasion of Ukraine.
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.
About ING Bank
ING Bank, a branch of ING DiBa AG (ING), is the commercial banking branch of ING DiBa AG of Germany (ING DiBa), a wholly owned subsidiary of ING Group N.V. of the Netherlands and the third-largest bank in Germany. ING operates in the retail, business, and wholesale banking segment, with a focus on service, commerce, and manufacturing transactions, with over 9 million customers.
About EXIM Hungary
EXIM Hungary is the country's official export credit agency; the only domestic bank and insurance provider specializing in international trade, foreign market expansion and investments, which, in addition to export financing, has been operating domestic credit programs to improve the international competitiveness of Hungarian companies for nearly a decade. With the professional knowledge, experience and international relations acquired over its more than 29-year operation, EXIM Hungary has helped to bring Hungarian products and services to nearly 150 countries around the world.
Elizabeth Howton, (202) 458-5922, email@example.com
For more information, please visit: https://www.miga.org