ESG plays a fundamental role in every decision we make and every action we take. We’ve seen a very tangible example of this in Hungary, which has increased the share of solar-derived electricity in its electricity production fivefold since 2018. Thanks to this substantial improvement in a very short period of time, 10.6% of the country’s annual electricity production comes from solar power, compared to 7.5% in Europe, making Hungary a prime example for transformation towards sustainable energy production in Europe.
As one of the main financiers of sustainable solar energy developments in the country, UniCredit Bank Hungary, has contributed to this impressive increase by financing the construction of many Hungarian solar projects totalling €250 million in structured loans.
A major contribution to our excellent lending position in the solar market came from our part in a significant solar park financing deal, which was the largest corporate green loan agreement of 2022 in Hungary, worth HUF 28 billion, to our client SolServices Kft. This deal was a milestone not only due to its size but the fact that the 100-megawatt solar plant being built in Szolnok will be one of the largest in the country, making an important contribution to renewable electricity supply. It will be able to generate the equivalent of 40% of the electricity consumption of the entire population of Jász-Nagykun-Szolnok County while saving tens of thousands of tons of CO2 emissions.
Our key to success in this field was solving the problem of how to participate in the financing of solar panel procurement in a way that creates a closed financing chain from the investment loan to the collateral manager to the solar panel manufacturer. This complex transaction also won UniCredit the Transaction of the Year award. In addition, as a pioneer among local banks, UniCredit Bank Hungary has further introduced a specialist retail loan product for purchasing and installing solar panels with a favourable interest rate.
We are fully committed to promoting sustainability, environmental awareness and ESG values.
Head of Structured finance
A conversation with...
Andrea D’Alessandro, Head of International Center, Corporates and Balázs Jávor, Head of Structured Finance, Corporates
Why was becoming a leader in solar energy financing important for UniCredit Hungary?
Head of International Center, Corporates
ANDREA: Overall Europe's efforts to work towards a more sustainable future has become a challenging task since geopolitical and economic threats appeared strongly in the last period. But we are aware that from every crisis,lies an opportunity. Sense of urgency to secure energy independence and higher focus on longer-term global climate threats impacts all of us, giving right awareness, motivation and commitment to work toward sustainability with the right matrix of green financing solutions.
BALÁZS: Supporting our clients in delivering their green and ESG ambitions is of key importance to us. We very much aim at demonstrating again and again how committed we are to sustainability and green initiatives. The development of the solar plants we finance also play a vital role in the green transformation and energy independence of the Hungarian economy.
Why are you particularly proud to have worked on this project?
ANDREA: This deal was the perfect matrix for achieving green success: it provided a strong, experienced international sponsor in renewable energy supported by a tailored financing structure – requiring involvement and hard work from a wide deal team across UniCredit Hungary – with the aim to finalise Hungary and the CEE region’s largest and first next-generation nature-friendly solar park (able to cover 42 % of the county’s total residential electricity consumption).
BALÁZS: We typically finance relatively large, industrial sized solar plants up to 50-100MW. Through these projects, we had the opportunity to develop a deep cooperation with highly experienced international sponsors. Together, we worked out tailored financing structures that covered the full value chain and could contribute to the realisation of cutting edge, state-of-the-art solar technology. Our deep cooperation with our business partners will continue for further solar projects in the future and will enable our clients to develop even more complex and flexible renewable energy solutions. We will be right there with them.
Head of Structured Finance, Corporates
How has this contributed to our Bank’s overall strategy?
ANDREA: UniCredit's Purpose is empowering communities to progress, which means taking every aspect of ESG into account and finding solutions that help all the individuals and communities we serve at every stage. This means, locally, we must be more sustainable (“walk the talk”) but most importantly, support our clients through any challenges they face in this transition. It is important that we execute a clear ESG strategy in line with our strategic plan.
BALÁZS: ESG and Sustainability is a focal point of our UniCredit Unlocked strategy. Our local success, which comes also as a result of deep cooperation between local and central teams, contributes largely to the execution of our strategy in CE&EE and further up at UniCredit Group level.