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EBRD and Jaido to finance business centre in Budapest
The European Bank for Reconstruction and Development (EBRD) has arranged a DM 19 million (ECU 9.9 million equivalent) debt-financing package for the construction of a 13,500 gross square metre business center in Budapest. The Central Business Center will help alleviate a shortage of modern office space in Buda, an area attracting increasing interest from both domestic and foreign occupiers. The project represents the most significant cooperation to date between the EBRD and a Japanese sponsor, in this case the Japan International Development Organisation (JAIDO).
Ron Freeman, First Vice President of the EBRD, said: "This business center, the EBRD's third project in the property sector, will help meet Budapest's need for modern office buildings with large, efficient floor designs. The project highlights the close working relationship that has developed among the EBRD, JAIDO and the Japanese business community to promote investment in the Bank's countries of operations. We look forward to continuing our relationship with JAIDO throughout the region."
Shinichi Yufu, President of JAIDO, explained that "this commercial building project signals JAIDO's role in and commitment to central and eastern Europe. It will be of major interest and great encouragement to many Japanese companies. I hope JAIDO's role as lead investor in the project will add stability to the region's investment climate and catalyse further Japanese investment."
Gàbor Demszky, Lord Mayor of Budapest, was equally enthusiastic about the project: "The city of Budapest welcomes this new development, which shows the continuing confidence of foreign investors in Hungary in general, and in Budapest in particular. We are particularly pleased that the center will be constructed on the Buda side of the city, where there is less modern office space."
The loan will be extended to Central Business Center Rt, a Hungarian limited liability company, and will be funded jointly by the EBRD (DM 9.5 million) and Austria's Raiffeisen Zentralbank Österreich (DM 9.5 million). Construction of the facility, to be located on Horvat utca, will begin later this month, with completion scheduled for the fourth quarter of 1996. Total project cost is estimated at DM 33 million.
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