IIB could launch operations at new Hungarian headquarters in 1H19

IIB could launch operations at new Hungarian headquarters in 1H19
Agreement on the relocation of IIB's HQ signed in 2018.
By bne IntelliNews January 30, 2019

The establishment of the International Investment Bank’s (IIB’s) headquarters in Budapest was the main topic of discussions between Prime Minister Viktor Orban and Nikolay Kosov, the IIB's president, at the prime minister's offices in the Castle District on January 28. 

The IIB’s new Hungarian headquarters could launch its operations in Budapest as early as the first half of this year, the IIB said, after the two sides confirmed their mutual intentions to take all necessary steps for prompt conclusion and ratification of the host-country agreement, preliminarily planned for the beginning of February. 

Hungary has lobbied to host the IIB since it rejoined the bank back in 2015. The deal was sealed during the talks between Russian President Vladimir Putin and Hungary’s Orban in September 2018. Kosov briefed Orban about the bank's activities and future plans. 

He noted that IIB member states unanimously voted to relocate the bank's headquarters to Hungary and authorised the bank to sign the relevant accord at a board meeting last December.

Obtaining a European address will give IIB an additional impetus to expand its international capital markets base, provide for a substantial increase in capital and scope of lending and investment operations, he said. 

The establishment of the headquarters in Hungary will strengthen Budapest as a financial centre, opening new financing opportunities for local business. IIB's loan portfolio in Hungary exceeds €100mn.

There are five supranational development banks in the European Union, but none are based in the central European region, Kosov noted. 

The bank plans to invest in the economies of shareholder countries in key sectors such as energy, agriculture, food production, pharmaceuticals, infrastructure development, and capital markets.

Also on January 28, Orban and Kosov attended the opening of one of Europe’s largest full-circle waterfowl processing complexes, initiated by private Hungarian agricultural company Hunent and built with the financial support of the IIB. The total investment amounted to more than €47mn, of which €37mn are guaranteed by the IIB.

“The project is a vivid example of fruitful and effective partnership between state, private business and international development institution represented by HIPA, Sberbank Hungary Ltd and International Investment Bank, respectively,” the IIB said in a statement. 

“Operation of the newly built high-tech plant will have a positive social and economic impact on  the region: more than 350 new workplaces have been created, thanks to a widespread introduction of modern energy-saving and ”green” technologies the environmental situation will be improved, a powerful additional impetus has been given to the whole south-east part of the country.”

Founded in 1970, IIB is a multilateral institution for development that focuses on supporting SMEs and socially significant infrastructure projects. The bankʼs members are Bulgaria, Hungary, the Socialist Republic of Vietnam, the Republic of Cuba, Mongolia, the Russian Federation, Romania, Slovakia, and the Czech Republic.

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