Hungary plans to channel the HUF 2,511 billion (EUR 7 billion) it expects to receive in the frame of the Recovery and Resilience Facility (“RRF”) under the NextGenerationEU initiative to finance investments primarily in the health sector and sustainable transportation according to the Hungarian recovery and resilience plan (“Recovery Plan”).
The main objectives of the Recovery Plan are the sustainable and inclusive growth path which contributes to economic growth, job creation and job preservation, business competitiveness and social inclusion, across all elements of the economic ecosystem and all groups in society.
The nine main areas to be financed partially or fully by RRF funds and the allocated funds are the following:
|1.||Demography and public education||230.69||0.64||9.19%|
|2.||Highly skilled, competitive workforce||281||0.78||11.19%|
|5.||Sustainable green transport||631||1.76||25.13%|
|6.||Energy (green transition)||262.49||0.73||10.45%|
|7.||Transition to a circular economy||103||0.29||4.10%|
Anti-corruption, Public Procurement measures,
As the chart above shows, the priorities of the Recovery Plan primarily lie with the health sector and sustainable transportation, followed by the green transition and public education.
The most immense projects among the 50 major reforms and investments of the Recovery Plan are
According to the Recovery Plan, 41 % of the funds aims to serve climate purposes and 23,1 % is devoted to digital transition.
Government Decree 413/2021. (VII. 13.) on the Basic Rules for the Implementation of the Hungary Recovery and Resilience Plan and the Institutions Responsible for it (“Implementation Decree”) sets out the framework of allocation of the RRF funds and implementation of the measures. The funds will be allocated by tenders and distributed in the frame of grant agreements. The competent national authority publishes the call for tender. The Implementation Decree refers to Government Decree 368/2011 (XII. 31.) on the implementation of the Public Finance Act (“Public Finance Government Decree”), which states that grant may be awarded if (i) it does not qualify as state aid pursuant to the European competition rules, or (ii) the grant is a state aid, but it complies with the European competition rules.
There are no general restrictions on companies eligible to funds regarding sector or type of activity. However, the Public Finance Government Decree states that the call for public tender shall contain the definition of the undertakings eligible to submit applications and, where appropriate, of those undertakings that are excluded from tendering. As a general rule, the national authority will decide on the application within thirty days of receipt in the case of a continuous evaluation or within thirty days of the closure of the stage set out in the call in the case of a phased evaluation.
More information can be found at webpage www.palyazat.gov.hu. Companies may require information about the distribution of the funds through the application of the FAIR SSO, which interface can be reached through this webpage.
The endorsement of the Resilience Plan submitted by Hungary in May had been stalled by the European Commission. Reportedly, the European Commission had requested additional guaranties and improvements from Hungary in the areas of anti-corruption, availability of information of public interest, independency of the judicial system, public procurement supervision and fair trade.
Despite the additional requests, the European Commission’s endorsement of the Resilience Plan is expected by the end of September.