The final call for proposals for the Just Transition Fund’s new SME loan program has been published. A total of 8.5 billion forints will be allocated for investments in Baranya County, and each business may apply for financing ranging from 5 to 500 million forints. The program combines interest-free loans with non-repayable grants, but to receive funding, applicants must meet energy efficiency, employment, and banking requirements.
Starting February 1, 2027, micro, small, and medium-sized enterprises may submit their applications for the Just Transition Fund SME Loan Program (KEHOP Plusz-5.1.0-26). In addition to energy efficiency and emissions reduction investments, the program also supports new business activities related to the green and circular economy.
The total budget for the three counties is 25.5 billion forints: Baranya, Borsod-Abaúj-Zemplén, and Heves have each been allocated 8.5 billion forints. Applications may be submitted at designated MFB Pont Plusz branches until October 31, 2027, or until the available funds are exhausted.
This is not a traditional grant
The program is a so-called “single-step combined loan program.” This means that a business can apply for a non-repayable grant and a zero-interest investment loan in a single application.
The amount of funding available for both development objectives is at least 5 million and no more than 500 million forints. Up to half of the funding amount may be a non-repayable grant; the other half must consist of at least an interest-free loan. The business must provide at least 10 percent of the project’s eligible costs from its own resources, free of any government subsidies.
The phrase “up to 50 percent subsidy,” which appears in many places, therefore requires clarification: the 50 percent refers not to the total investment cost, but to the requested financing.
For example, in the case of a 100 million forint project that is fully eligible for funding—if the business provides only the minimum required 10 million forint in its own funds—a maximum of 90 million forint in financing may be requested. Of this amount, up to 45 million forints may be a non-repayable grant, while the remaining 45 million forints is an interest-free loan. The actual amount of the grant may be lower than this, depending on the applicable state aid scheme and the size of the business.
The amount of financing may not exceed fifteen times the operating profit achieved by the business in the fully closed fiscal year preceding the credit assessment. For companies with weaker performance, this limit may result in an eligible amount that is significantly lower than the general ceiling of 500 million forints.
The program also requires 50 percent collateral coverage. The machinery and equipment purchased with the investment, as well as the relevant real estate, must be included in the collateral, and additional collateral may be required based on the financial review. The loan term is typically 24–82 months, depending on the depreciation of the acquired assets; for projects involving real estate or building energy efficiency investments, the term may be up to 120 months.
It is not the company’s registered office that matters, but the location of the investment
The Baranya County funding program is not limited to businesses headquartered in Baranya County. According to the call for proposals, the actual location of the project is the deciding factor: a business registered in Budapest or another county may also apply for funding if it carries out its investment in Baranya County.
However, it is an important condition that the location in Baranya County must already be listed in the commercial register or the business registry as the company’s registered office, business location, or branch office at the time the application is submitted. The financed assets must be capitalized at this location, and the business must conduct economic activities there for the entire term of the loan.
This is also significant from the perspective of investment promotion: the program can help existing external businesses relocate to Baranya County, provided they register their new location in a timely manner and launch actual investments or economic activities there.
Micro, small, and medium-sized enterprises that have at least one full, closed fiscal year supported by financial statements are eligible to participate in the program. Eligible entities include, among others, business corporations, cooperatives, sole proprietorships, self-employed individuals, and nonprofit business corporations. However, start-up businesses that have not yet completed a full fiscal year are not eligible for funding.
First Development Priority: Energy Efficiency and Emissions Reduction
The first sub-goal includes technological changes that improve the energy efficiency of buildings and production processes and reduce greenhouse gas emissions.
Energy efficiency improvements must achieve at least a 30 percent reduction in primary energy consumption. For building energy efficiency investments, this result must be substantiated in advance with a valid energy certificate; for the modernization of technological or manufacturing processes, it must be substantiated with an energy audit, and then verified after the investment is completed.
Eligible for funding may include, among other things:
- replacing existing production technology with new, energy-efficient machinery and equipment;
- purchasing production-optimizing, energy-efficient equipment;
- utilization of waste and residual heat;
- facade, floor, and roof insulation;
- replacement of windows and doors and shading;
- modernization of heat pump, heat recovery, ventilation, cooling, and domestic hot water systems;
- Installation of energy-efficient lighting, an energy management system, and smart meters.
For a building energy efficiency retrofit, the replacement of at least two types of building components is required. The construction of a new building section or a general building expansion is not eligible for funding on its own under this sub-objective.
Solar panels and energy storage systems may only be included as supplementary project components, up to a maximum of 20 percent of eligible costs. The system must primarily serve the site’s own energy consumption; a standalone solar farm generating electricity for sale to the grid is not eligible for funding.
In the context of technology transitions aimed at reducing emissions, for example, the electrification of production processes and the introduction of green hydrogen or biogas can be supported. In this case, the final call for proposals no longer stipulates a general emissions reduction of at least 30 percent, but it does require a verified reduction and the maintenance of production capacity.
Second Development Objective: Green and Circular Economy Diversification
The second objective does not simply support replacing existing machinery with more modern equipment. Businesses must demonstrate that the investment will create a new or significantly expanded product, service, production process or business model.
Eligible investments may include the development of manufacturing and service capacities related to solar energy, batteries and energy storage technologies, heat pumps, geothermal energy, hydrogen technologies, biogas, electricity grids and electric vehicle charging solutions.
The programme may also support the establishment of service capacities required for the installation, maintenance, repair and end-of-life processing of clean technologies.
Circular economy investments may include:
- the development of more durable, repairable and recyclable products;
- refurbishment, repair and remanufacturing activities;
- product-sharing, rental or “product-as-a-service” business models;
- reverse logistics and product take-back systems;
- waste and by-product processing and material recovery;
- the use of secondary raw materials;
- the development of virtual marketplaces for reusable or recyclable materials.
Under this objective, the construction of new buildings, the expansion of existing buildings or the modernisation of related infrastructure may also be included. However, their combined costs may not exceed 40% of the total eligible project costs.
Retaining existing jobs is a condition for the grant component
Diversification projects are not required to create new jobs, but they must maintain the existing level of employment.
The full-time equivalent (FTE) employment level during the 12 months preceding the submission of the application is compared with the average employment level during the 12 months following project completion. The latter must be equal to or higher than the baseline level.
If the business fails to meet this requirement, it loses the non-repayable grant component: the entire disbursed financing amount is converted into an interest-free loan. Failure to achieve the energy-efficiency target may have even more serious consequences. The required 30% primary energy savings is a fundamental eligibility condition, and failure to meet it may result in the recovery of the entire disbursed amount.
What cannot be financed?
The call for applications contains several explicit exclusions. The following costs, for example, are not eligible:
- the purchase of real estate or land;
- the purchase of motor vehicles;
- the purchase of equipment powered by internal combustion engines;
- application preparation fees;
- solar power plants established for electricity sales to the grid;
- investments related to the production, processing, transportation, storage or combustion of fossil fuels.
Projects submitted by agricultural enterprises are also excluded if at least 40% of their revenue in the last closed financial year preceding the application came from agricultural activities.
As a general rule, the investment may only commence after the loan application has been submitted. Even placing a legally binding order for machinery or equipment may qualify as the commencement of the project, so particular attention must be paid to the timing of contracts and orders. The investment must be physically and financially completed within 24 months of signing the loan agreement.
The final funding allocation is lower than originally planned
The draft call published for public consultation in early October envisaged a total national budget of HUF 31 billion, of which HUF 11 billion would have been allocated to Baranya County. In the final version, the total budget was reduced to HUF 25.5 billion, with Baranya’s allocation decreasing to HUF 8.5 billion. This represents a reduction of HUF 2.5 billion, or almost 23%, for Baranya.
The planned opening date for applications was also changed: instead of 1 January 2027, the programme will open on 1 February 2027. One positive change is that the final call no longer generally requires a minimum 30% reduction in greenhouse gas emissions for technological transition projects. However, the requirement to achieve at least 30% primary energy savings for energy-efficiency investments remains unchanged.
Preparation should begin well before February
The programme may offer favourable financing opportunities for businesses planning to modernise energy-intensive production, switch to renewable-based technologies or launch new green and circular economy business activities in Baranya. However, the non-repayable component is not automatic: energy performance documentation, adequate operating profit, own contribution, collateral and a thoroughly prepared investment project will all be required.
Before applying, businesses should check:
- whether the implementation site is properly registered in the company register;
- the maximum eligible financing amount based on the operating profit reported in the last closed financial year;
- the project’s energy-efficiency or emissions-reduction performance;
- the availability of the required own contribution and collateral;
- whether the employment retention requirement can be met;
- whether quotations, technical documentation and permits are ready.
Applications will be submitted at designated branches of the MFB Pont Plusz network. Since the application period may close before 31 October 2027 if the available funding is exhausted, businesses with eligible projects should aim to have their applications ready by the February opening date.
Sources:
- Final KEHOP Plusz-5.1.0-26 call for applications – full document (PDF)
- Summary of the final call – MSB Fejlesztési Tanácsadó Zrt.
- Chamber of Commerce information on the launch of the programme
- Background to the Just Transition Fund in Hungary – European Commission
- Overview of the Just Transition Fund – European Commission
- MFB Pont Plusz network and branch locator
This article is based on the final call for applications available as of 29 October 2026. When preparing an application, the current version of the call and the related procedural documents should always be considered authoritative.
