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Hungary has received €140m from the European Investment Bank (EIB) as the first installment of an approved €500m loan to finance road upgrades in the country.

The grant will be spent over the next five years to improve and modernise the major sections of the country’s road network in line with Hungary’s National Transport Infrastructure Development Strategy.

EIB vice-president Laszlo Baranyay said: "The EIB loan will support, together with the contribution from Hungary’s resources, investments in modernising the road network, totalling an estimated €1.2bn.

"The focus is on infrastructure as a crucial factor in improving Hungary’s accessibility and connectivity and thus enhancing the country’s competitiveness and the quality of life of its citizens by providing safer and more fluid transport, meeting the increased demand."

The Hungarian Government will also use the funding for sub-projects that not only includes the development of new roads, but will also see the revamp of existing roads.

"The focus is on infrastructure as a crucial factor in improving Hungary’s accessibility and connectivity."

The projects will be undertaken in a bid to reduce traffic congestions and mitigate regional bottlenecks.

The smooth traffic flow will improve connectivity with the strategic, mostly trans-European transport corridors, as well as modernise the existing road network.

According to Hungary Economy Minister Mihaly Varga, the fund will facilitate the development of those parts of the country’s public road network that do not belong to the Trans-European Transport Network (TEN-T) and are therefore ineligible for European Union (EU) funding.

Hungary recently signed the 25-year credit deal with EIB and plans to use the remainder of the loan in 2018 and 2020.

In January, EIB offered a €160m loan to fund the construction of a 33km-long motorway section in another European country.

The motorway section will be built in Bavaria, Southern Germany.

Image: EIB funds €140m of the €500m loan approved for road development projects in Hungary. Photo: courtesy of EIB.