Hungary authorities raises the capital of state-owned power firm
BUDAPEST, Dec 23 (Reuters) – The federal government of Hungary determined to lift the capital of state-owned power firm MVM Zrt by 41 billion forint ($108.79 million) to 849.4 billion forints, the corporate stated on Friday in a press release on the inventory change’s web site.
Hungary is very depending on Russian oil and gasoline imports, and hovering power costs precipitated the finances and present account deficit to balloon this yr, posing a problem to Prime Minister Viktor Orban’s authorities.
Hungary will seemingly must pay 17 to twenty billion euros for its power invoice subsequent yr, Orban stated on Wednesday, including that his authorities would elevate the required financing available in the market.
Beneath a 15-year deal signed final yr, earlier than Russia’s invasion of Ukraine, Hungary receives 4.5 billion cubic metres (bcm) of gasoline per yr by way of Bulgaria and Serbia underneath a long-term cope with Russia.
So as to ease the burden of excessive power payments on the present account deficit and the forint forex, MVM reached an settlement with Russia’s Gazprom in October that permits it to defer its funds for gasoline purchases if costs exceed a sure threshold worth.
The deal permits MVM to pay for the gasoline over the approaching three years if costs surge.
So as to shore up the forint that fell to a file low in October, the Nationwide Financial institution of Hungary introduced in the identical month that it’s going to begin offering overseas forex from its worldwide reserves to finance power imports.
Excessive power costs additionally pressured the federal government to finish a decade-long coverage and scrap an power value cap for high-usage households from August. ($1 = 376.8800 forints) (Reporting by Anita Komuves, Enhancing by Louise Heavens)