For Local Governmental Enterprises

As a result of the changes in the Municipality sector during the past few years, the notable payment difficulties and the expected changes deriving from the new Municipality Law, we have, initiated by the European Investment Bank (EIB), temporarily suspended the guarantee undertakings of new municipality loans as of 20.06.2011.

Major objective of the guarantee program of Hitelgarancia Zrt. for local governmental enterprises is to support the enterprises of local governments in obtaining development resources by offering absolute guarantee and thus foster their competiveness and closing up.

The scope of local governmental enterprises covers those businesses, where local governmental/association ownership ratio exceeds 25% within the ownership structure.

Major objective of the guarantee program of Garantiqa Hitelgarancia Zrt. for local governmental enterprises is to support the enterprises of local governments in obtaining development resources by offering absolute guarantee and thus foster their competiveness and closing up.

The scope of local governmental enterprises covers those businesses, where local governmental/association ownership ratio exceeds 25% within the ownership structure.

In most of the cases the aim of a local governmental enterprise establishment/purchase is to farm out an activity falling under the scope of any local governmental task delivery to an external party, outside the local governmental structure. It also seems to be common a practice that the towns establish project companies for the accomplishment of certain investments.

In the case of local governmental enterprises the investments of the next few years are enabled mainly by the European Union subsidy resources, and these resources nearly in all cases require also own capital. Expectedly the local governmental enterprises will be the participants of the measures taken based on the development target areas, partially as the beneficiaries of the subsidies but mainly as the operating parties of the investments. It is  a common practice that the necessary own capital required for the non-refundable subsidy obtained by the local government is provided by the operating company for the investment, this way the financing need is realised by the party. Therefore within the development-related financial services besides the own capital financing the financing of the preparation, the advancement of the subsidy, lease and factoring services are required and for all the above provision of guarantee.