14 October 2020

The MNB considers it a crucial climate-friendly decision that the first Hungarian commercial bank joined an international initiative that aims to encourage energy efficient real estate purchases and investment in real estate to increase energy efficiency, by extending preferential loans.

The Magyar Nemzeti Bank (MNB) is pleased that the OTP Bank joined an European platform named Energy Efficient Mortgages Initiative (EEMI), as the first Hungarian credit institution.

EEMI sets out to encourage energy efficient housing construction and investment in real estate to increase energy efficiency by extending preferential loans. Participants can contribute to the improvement in risk management in green mortgage borrowing, issues of green mortgage loans and the reduction in private energy consumption and the related greenhouse gas emissions in Hungary through cooperation with international partners and Hungarian banks involved in the project.

The MNB joined the EEMI Advisory Board in July 2019, and also provides an incentive for energy efficient lending in the domestic scene by offering a capital requirement reduction from 2020. The MNB deems it important that a growing number of Hungarian credit institutions should participate in energy-efficient residential lending even through an EEMI membership in the future, to demonstrate the fact that they consider their role important in environmental sustainability via their financial products and services.

The MNB announced its Green Programme on 11 February 2019 to mitigate the ecological, economic, and financial risks arising from environmental anomalies and issues and to enhance Hungary’s competitiveness in a climate-friendly manner jointly with financial market participants.

The energy efficiency of buildings is a real opportunity for the green economy, which is therefore included in a package of proposals for economic stimulus measures related to COVID-19, published by the MNB recently. A large-scale reconstruction of the domestic stock of residential and non-residential buildings could contribute to the fight against climate change by creating strong demand for the Hungarian construction industry.

Magyar Nemzeti Bank