EBRD and group of banks support the refinancing of Hungary's strategic gas storage

By Svitlana  Pyrkalo
@pyrkalo

The European Bank for Reconstruction and Development (EBRD) has participated in a syndicate to refinance a strategic gas storage facility in Hungary, following the sale of MOL’s majority stake in the gas storage to the Hungarian Development Bank and the Hungarian Hydrocarbon Stockpiling Association.  

In 2009 the EBRD co-financed the original construction of the storage facility at the Szőreg-1 reservoir in the south of the country, close to Serbia, with a €200 million loan to MOL, Hungary’s leading oil and gas company. Following a series of supply crises, the gas storage in a depleted oil field was needed to improve energy security in Hungary and in the region. The EBRD has also financed gas storage in Croatia and allocated funds for storage in Serbia.

In the current transaction, €100 million of the amount outstanding from the original EBRD corporate loan to MOL was converted into a long-term secured project finance loan to MMBF, the storage operating company. With the successful financial close of this deal, MOL has sold its entire stake in MMBF. MMBF will ultimately be 51 per cent owned by the Hungarian Development Bank (which is in turn wholly owned by the government) and 49 per cent by the Hungarian Hydrocarbon Stockpiling Association, an independent association of all oil, oil products and gas traders in Hungary.

EBRD Managing Director for Energy and Natural Resources, Riccardo Puliti, said: “We see this as a successful completion of a strategically important project – important not only for Hungary but for energy security in the wider region. We are also very pleased to note, with this deal, the return of project financing in central and eastern Europe. It almost ground to a halt in the aftermath of the crisis but is key for strategic infrastructure projects like the Szőreg-1 gas storage.”

MMBF signed the new €114 million and HUF 60 billion facility agreement with a group of banks, in which the EBRD was joined by ING Bank N.V., ING Bank, a Branch of ING-DiBa AG, MKB Bank Zrt., Raiffeisen Bank Zrt., and OTP Bank Nyrt. OTP Bank Nyrt. OTP Bank acted as agent for the transaction.