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EBRD loan to improve availability of fruit and vegetables in Hungary
The range and quality of fresh fruit and vegetables available to Hungarian consumers will be greatly improved as a result of a loan signed today between the Budapest Wholesale Market Company (Nagybani Piac) and the European Bank for Reconstruction and Development. The amount of the loan is ECU 5.91 million (US $6.72 million). The loan agreement was signed by Mr Erno Bacsfalusi, Chairman of the Budapest Wholesale Market Company, Mr. Gabor Demszky, the Mayor of Budapest, and Mr Jacques de Larosière, President of the EBRD.
"This loan will improve market competition in the biggest wholesale market in eastern Europe," Mr de Larosière said. "The Bank is particularly pleased with the innovative financial structure of the project. It is our first infrastructure project guaranteed by a Municipality and secured by a commercial security package. Similar financial structures could be attractive for other cities in the region which are seeking to finance local infrastructure independently from the State and to mobilise much needed private sector finance."
Mr Demszky said: "This project will directly benefit the Hungarian population. The project will help bring more quickly better quality produce to consumers through the rationalisation of existing operations and the construction of new facilities within the market. It will attract new private sector operators, and make distribution in Hungary more efficient."
The loan will finance the Wholesale Market Company's second phase of development, involving construction of cold storage and banana ripening facilities, handling and service areas for operators and traders. It will also enlarge parking areas.
The total project cost is estimated at US$ 26.4 million which will be financed by the EBRD, the Budapest Municipality, the Market Company and potential operators. Private operators will contribute to the financing through lump-sum payments representing the acquisition of lease rights and payable before the start of construction.
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