Description of the goods or services required
Designing Recommendations for a Sustainable Capital Markets Strategy and Action Plan for Hungary
The Magyar Nemzeti Bank (the “MNB”) has requested support from the European Commission under Regulation (EU) 2017/825 on the establishment of the Structural Reform Support Programme (“SRSP Regulation”) to assist the MNB (together with its partners, including the Ministry of Finance of Hungary, the Ministry of Innovation and Technology (in relation to climate finance) (the “Ministries”) and the Budapest Stock Exchange) in developing the Sustainable Capital Markets Strategy and Action Plan in Hungary (the “Project”). The Project is funded by the European Commission via the European Commission’s Directorate General for Structural Reform Support (“DG REFORM”) and implemented by the Local Currency and Capital Market Development (“LC2”) team of the European Bank for Reconstruction and Development (the “EBRD”), in cooperation with the DG REFORM.
The European Union (“EU”) 2030 climate and energy framework sets three key targets: (i) at least 40% cuts in greenhouse gas emissions (from 1990 levels); (ii) at least 27% share for renewable energy; and (iii) at least 32.5% improvement in energy efficiency. To achieve these goals, it is estimated that Europe has to close a yearly investment gap of almost EUR 180 billion ; such investments are to be classified as “green” and partially channelled through capital markets.
On 11 December 2019, the European Commission adopted a Communication on the European Green Deal, outlining the actions to be taken in order to achieve European climate neutrality by 2050. It puts sustainable competitiveness at the centre of all European economic development and its financial system.
In Hungary, the National Energy Strategy 2030 and the Second National Climate Change Strategy are the key national documents in conformity with the climate and energy policy objectives. The Hungarian Government approved five strategic policy documents on 8 January 2020, including the draft of National Clean Development Strategy which declares the objective of reaching climate neutrality in Hungary by 2050. This is a significant increase of ambition as compared to the 2050 emission reduction targets (minimum 52%, preferred 85%) envisaged in the Second National Climate Change Strategy, adopted in 2018.
The Hungarian Parliament and the Government has taken clear steps to align itself with the EU in this regard. The Hungarian prime minister announced the Action Plan on Climate and Nature Conservation in February 2020. One of the actions of this plan is the issuance of green state bonds. The Hungarian Public Debt Management Centre has recently started a project aiming to create a green bond framework which will contribute to Hungary’s transition to a low carbon, climate resilient and environmentally sustainable economy.
In order to support an environmentally and socially sustainable economic system in the long term in Hungary, as well as reorienting capital flows towards sustainable investment, a Sustainable Capital Markets Strategy and Action Plan with clear and concrete recommendations on how to develop a green capital markets investor base is crucial for the Hungarian Government and the MNB.
The EBRD therefore wishes to engage a firm (the “Consultant”) to support the MNB (together with its partners, including the relevant Ministries and the Budapest Stock Exchange) to develop a Sustainable Capital Markets Strategy and Action Plan in Hungary as well as an Awareness Raising Campaign.
The overall objective of this Project is to contribute to institutional, administrative and growth sustaining structural reforms in Hungary.
The specific objectives of the Project are:
• to support the initiatives of national authorities to design their reforms according to their priorities, taking into account initial conditions and expected socioeconomic impacts;
• to support the national authorities in enhancing their capacity to formulate, develop and implement reform policies and strategies and in pursuing an integrated approach ensuring consistency between goals and means across sectors;
• to support the efforts of national authorities to define and implement appropriate processes and methodologies by taking into account good practices of and lessons learned by other countries in addressing similar situations;
• to assist the national authorities in enhancing the efficiency and effectiveness of human resource management, inter alia, by strengthening professional knowledge and skills and setting out clear responsibilities.
The Consultant shall produce the following outputs by implementing the activities listed below:
Output I: Assessment Report
The first output of the technical support is a comprehensive assessment of the ecosystem of Green Finance in Hungary. The assessment will focus primarily on capital markets, which will analyse the current legal and regulatory framework surrounding Green Finance in the country and will compare it with the most relevant EU and/or international practice (including the European Commission’s recently adopted legal initiatives on Sustainable Finance and EU Taxonomy). It is expected that the analysis will serve as a foundation for the recommendations which will form the basis of the Strategy and Action Plan.
Output II: Awareness Raising Campaign
The second output of the technical support is to organise an awareness raising campaign, including events at the premises of the MNB in Budapest, Hungary. The events will present the findings of the Assessment Report and will also contribute to the visibility of the Project to the wider public, increase the interest of investors and other market participants who wish to issue or invest into sustainable/green products.
Output III: Recommendations for the Hungarian Strategy and Action Plan on Sustainable Capital Markets
Following the results of the Assessment Report, the third phase of the Project would be devoted to drawing up recommendations for the Hungarian Strategy and Action Plan on Sustainable Capital Markets (covering both public and private sector and including green incentives with a focus on green bond issuance).