The government of Hungary has announced the launch of a new state investment company in cooperation with the Hungarian Development Bank (MFB) and the National Development and Innovation Office (NKFIH). The Research and Development and Innovation State Capital Fund Management Company will provide seed capital and grants to some 1000 R&D and innovation companies in Hungary over the next three years, reports online daily napi.hu.
The fund management company will have access to a first round of HUF 50 billion (USD 179 million), HUF 30 billion of which will be provided by the European Union through its Economic Development and Innovation Operational Programme (GINOP) via the NKFIH, and the remaining HUF 20 billion will come directly from the MFB. The professed goal of the organization is to support innovative enterprise not only financially but in a mentoring capacity as well, according to napi.hu.
HUF 10 billion will be set aside to support the smallest businesses, mainly as seed capital for their initial research and development efforts, with up to 500 start-ups receiving around HUF 10 million each. A further HUF 16 billion will go toward the seed capital needs of other innovative businesses, with some 160-200 such businesses receiving an average of HUF 60 million each. The remaining HUF 24 billion will be made available to mature companies and projects, each of which could be eligible to receive an average of HUF 350 million in development capital.
According to plans, the state will be able to invest in more than 1,000 research and development and innovation companies in Hungary by 2020 via the management company. The first investments are expected to be made through the new company by the first quarter of 2017.
The announcement comes in the wake of recent revelations that much of the USD 480 million in so-called EU Jeremie funds were either squandered or embezzled in Hungary.