The central bank has extended its green capital requirement relief program again

According to the information, the volume of green loans and bonds included in the program exceeded 1,500 billion forints last year.

The central bank has also broadened the scope of the modernization of the green residential capital requirement (ZLT) program, which can now also include energy efficiency measures implemented in residential buildings listed in the Energy Efficiency Obligation System Catalog.

It was announced that the corporate and municipal loans (ZVT) program was also expanded, defining new green loan objectives (such as agricultural irrigation development, rail transport development, activities supporting the transition to a circular economy); including new types of financing instruments (sustainability-linked loans and bonds); furthermore, energy communities are named as new legal entities, to which exposure may also exist from now on.

Through the programs, the central bank improves the environmental risk profile of the banking sector and encourages green lending through a positive incentive by waiving part/all of the capital requirement for a given year for environmentally sustainable retail, corporate and local government exposures (loans, bonds) in accordance with the detailed conditions, they explained. All this reduces the banking risk of climate change and domestic carbon emissions, while the limits on the discount ensure that the appropriate capital level is maintained.

The volume of all credit institution exposures affected by the MNB’s green capital requirement program amounted to HUF 1,532 billion at the end of the third quarter of last year, of which HUF 1,144 billion was corporate loans, HUF 118 billion was corporate bonds, and HUF 271 billion was housing loans.