This summary covers a loan by ING-DiBa AG (ING) of the Netherlands, KBC Bank N.V. (KBC) of Belgium, and other banks to be identified, to Hungarian Export-Import Bank Plc (Hungary Exim) in Hungary. ING, KBC, and other financial institutions still to be identified, have applied for a MIGA guarantee of up to $737.2 million for a period of up to six years against the risk of Non-Honoring of a Sovereign Financial Obligation (NHSFO).
The proposed project involves the expansion of lending by Hungary Exim, a wholly-owned financial institution of the Government of Hungary. Hungary Exim is the official state-owned export credit agency tasked with promoting Hungarian exports by granting loans and guarantees to small and medium-sized enterprises (SMEs) that export to markets where obtaining affordable financing can be challenging.
This project is a Category FI-2 project according to MIGA’s Policy on Environmental and Social Sustainability (2013). MIGA has analyzed Hungary Exim’s portfolio for types of transactions, tenor, size, industry sectors, and exposure to MIGA’s exclusion list. Corporate loans in the portfolio are mostly in sectors that have limited environmental and social risks. Accordingly, the applicable environmental and social requirements are MIGA’s Exclusion List; applicable national social and environmental laws and regulations; and MIGA’s Performance Standards.
MIGA also assessed Hungary Exim’s labor practices and existing environmental and social management system (ESMS). Hungary Exim follows the OECD recommendations, including Human Rights, Anti-Bribery, promotion of sustainable lending and environmental and social due diligence. An ESMS is implemented, including categorization of projects, screening against the Performance Standards for high risk projects, disclosure of project information and monitoring. Based on MIGA’s review and applicable performance requirements, Hungary Exim will be expected to continue the implementation of the existing ESMS and current practices for labor and working conditions.
Bringing accessible and affordable financing to Hungarian SMEs in the export sector, while supporting the country’s banking sector is crucial in ensuring that Hungary reaches its full economic potential. Hungary Exim plays a strategic role in helping the country improve its trade competitiveness, as well as create and maintain jobs.