Hungary bars Budapest Airport from accessing Covid-19 funds

4 November 2020 (Last Updated November 4th, 2020 10:45)

The Government of Hungary has reportedly blocked Budapest Airport, the largest airport in the country, from accessing Covid-19 funding from a financial institution.

Hungary bars Budapest Airport from accessing Covid-19 funds
Budapest Airport in Hungary. Credit: SBL1980.

The Government of Hungary has reportedly blocked Budapest Airport, the largest airport in the country, from accessing Covid-19 funding from a financial institution.

According to a Bloomberg report, the airport sought a short-term loan of €50m ($58m) from the European Bank for Reconstruction and Development (EBRD).

The funding would have been used to improve the airport’s financial situation, pay salaries and ensure business continuity amid the Covid-19 pandemic that crushed travel demand.

However, the Hungarian Government directed EBRD’s decision-making body earlier this year to remove Budapest Airport’s application, the report said.

An unnamed source familiar with the matter told the publication that it was ‘extraordinary’ for a government to block investment into its own country. The decision may reduce the valuation of the strategic asset, the person added.

EBRD declined to comment on the matter while the Hungarian Government did not respond to Bloomberg queries.

This comes around a month after a report claimed that allies of Hungarian Prime Minister Viktor Orban has made an unsolicited purchase offer to acquire Budapest Airport.

Budapest Airport is currently owned by Singapore’s sovereign wealth fund GIC, a Canadian pension fund and AviAlliance, an airport management company. They don’t have plans to sell the airport.

Before the pandemic, Prime Minister Orban voiced support to bring the airport under state-control.

Last month, the airport axed 236 jobs due to the impact of the pandemic.

As of 4 November, Hungary has reported more than 86,700 confirmed Covid-19 cases. The death toll in the country stands at 1,973.