Further favourable changes to the VIP cash subsidy regulation

On 4 August 2023, Government Decree No 210/2014 (VIII. 27.) (Decree on the VIP cash subsidy) was amended, making it possible to grant the VIP cash subsidy for investments aimed at accelerating the transition to a net-zero economy. The conditions of the regional VIP cash subsidy have also become more favourable: the minimum investment value has been reduced to EUR 3 million, with the exception of county and district seats, the aid intensity has been increased to 60% in Baranya, Borsod-Abaúj-Zemplén and Heves counties, and in some cases a reduction in the collateral amount can also be requested. In the case of investments aimed at renewable energy production for own use, subsidy can also be granted in Budapest.

A new aid category is available

By implementing the aid category under section 2.8 of the TCTF (Temporary Crisis and Transition Framework), subsidies can be granted for the following investments aimed at accelerating the transition to a net-zero economy:

• production of strategic equipment that facilitates the roll-out of renewables and carbon capture technologies (e.g. batteries, solar panels, wind turbines, heat-pumps, electrolysers and equipment for carbon capture usage and storage); 

• production of key components designed and primarily used as direct input for the production of the equipment defined in the previous point;

• production or recovery of related critical raw material necessary to produce the equipment and key components defined in the previous points. 

The subsidy is available throughout Hungary, the maximum aid rate available in Budapest is 15%, and 35% outside Budapest. An important condition for the subsidy is that there is a real risk that without the subsidy the project will not be implemented within the European Economic Area.

Favourable changes in the entry conditions of the regional VIP cash subsidy

According to the amendment to the decree, the minimum eligible cost is reduced in many municipalities as follows:

• At least EUR 10 million: in Győr, Székesfehérvár, Tatabánya, Szekszárd, Kecskemét, Szombathely, Veszprém, Zalaegerszeg, Debrecen, Szeged or Eger 

• At least EUR 5 million: in Salgótarján, Miskolc, Nyíregyháza, Békéscsaba, Pécs, Kaposvár, Szolnok or any district seat (if the county seat and the district seat are the same, the higher prescribed amount of eligible costs must be taken into account), 

• At least EUR 3 million: in municipalities that do not belong to the other two categories (county seats and district seats)

Favourable changes to the regional aid map

According to the amendment of the Government Decree regulating the regional aid map, the maximum aid intensity has been increased from 50% to 60% in Baranya, Borsod-Abaúj-Zemplén and Heves counties; additionally, this is increased by 20 percentage points for small businesses and by 10 percentage points for middle-sized businesses.

Aid for investments aimed at renewable energy production is now available in Budapest

Aid can now be granted for additional investments aimed at renewable energy production in Budapest if the investment is connected to a main investment of at least the same value, and the total investment value reaches EUR 10 million. The maximum aid intensity for additional investments aimed at the production of renewable energy is 30% (which can be increased by 10-20 percentage points for SMEs). The maximum value of the aid is EUR 15 million.

Significant easing of the collateral system

According to the easing, in certain cases it is possible to request a reduction of the collateral if the minimum monitoring period has already expired (5 years, or 3 years for SMEs) and the investor has fulfilled its obligations for these years, but at least one year is still left from the monitoring period. In addition to new subsidy applications, this can also be requested for applications which were already submitted before the amendment of the Government Decree entered into force, if the subsidy contract has not yet been concluded.

PwC Hungary has extensive experience and a dedicated team of experts in the fields of investment and energetics, energy efficiency solutions and incentives (including our own energy auditing experts). Therefore, we can provide full-scale complex assistance in these topics, from technical and financial planning to the management of the entire subsidy process.

If you have any questions in this regard, or other subsidy-related matters, you are welcome to contact our experts or your usual contact person at PwC.

Barbara Koncz 
Partner
Email: barbara.koncz@pwc.com

Andrea Végső 
Senior manager
Email: andrea.vegso@pwc.com

Tünde Kis
Director
Email: tunde.kis@pwc.com

Boldizsár Cseh 
Manager
Email: boldizsar.cseh@pwc.com

Detre Horváth 
Director
Email: detre.horvath@pwc.com