Green Light for Sustainable Real Estate: MNB Program Extended and Expanded

In recent years, it has become clear that sustainability is no longer merely a reputational issue in the real estate market; it is increasingly a defining factor in financing viability, asset value, and long-term competitiveness. Demand from both investors and tenants for green-certified or ESG-compliant properties is on the rise, while financiers are also showing a growing preference for projects that meet sustainability expectations.

In Hungary, the Green Capital Requirement Discount Program of the National Bank of Hungary has already played a key role in this process, and its extension and expansion until December 2027 sends an important signal to the market.

The earlier phase of the program has already demonstrated that it can serve as a meaningful incentive for sustainable investments. The scheme enabled various market participants—including real estate developers and owners—to access green financing under more favorable conditions. The extension and expansion of the program further strengthen this framework and may contribute to making a broader range of sustainable projects financeable.

In the real estate sector, access to green financing under the program is linked to compliance with the requirements of the EU Taxonomy. This regulatory framework provides a clear and traceable set of criteria for qualifying investments or properties as sustainable. This not only creates a transparent risk management basis for financiers but also offers guidance to market participants in planning their developments. Moreover, taxonomy alignment goes beyond direct financing benefits: it can increase companies’ green CAPEX and OPEX ratios—an increasingly important metric for institutional investors and fund managers—and may even stimulate the creation of new, sustainability-focused real estate funds.

The program retains its two-tier incentive structure: the higher, up to 7% green capital requirement discount remains tied to full EU Taxonomy compliance, while a lower, 5% level (Huxonomy) is also available through two alternative approaches. These include a simplified version of EU Taxonomy requirements, as well as the application of international green certification systems such as BREEAM, LEED, or DGNB. This two-tier system allows market participants to choose the appropriate level of compliance based on the complexity and readiness of their projects, while full taxonomy alignment continues to provide greater financial advantages.

The expansion of the program opens up several new opportunities for real estate market players. An important change is that smaller-scale energy efficiency investments are now also eligible for financing. This is particularly significant for the existing building stock, where in many cases targeted energy upgrades—rather than full-scale renovations—are sufficient to improve sustainability performance.

In addition, the modifications strengthen the role of climate adaptation: the program now allows for the fulfillment of adaptation objectives defined as “substantial contribution” under the EU Taxonomy framework. As a result, investments focusing on climate resilience—such as resistance to extreme weather conditions or mitigation of the urban heat island effect—can also become eligible for support.

This is particularly beneficial for real estate stakeholders who have already recognized the importance of adapting to climate change and aim to enhance the resilience of their portfolios through innovative developments. Furthermore, it may bring new segments of the existing building stock into the scope of green financing: buildings that previously did not meet taxonomy requirements due to their energy performance may now realistically comply through adaptation methodologies.

The central bank’s initiative thus serves both as a market incentive and a professional guideline. Expanding green financing frameworks not only creates new opportunities for sustainable real estate developments but also contributes to the faster alignment of Hungary’s building stock with European regulatory and investor expectations. As a result, the range of financed construction activities and real estate projects compliant with the EU Taxonomy is expected to grow further in the coming years.

In an evolving regulatory environment, it is becoming increasingly important for market participants to ensure that developments and property portfolios meet sustainability and financing expectations from the earliest planning stages. This is where Greenbors Consulting provides support, assisting clients throughout the entire project lifecycle in achieving taxonomy compliance. Our experts support stakeholders in areas such as EU Taxonomy assessments, climate risk analysis and adaptation planning, as well as providing the professional background required for taxonomy verification and green financing. In addition, we offer support in meeting Huxonomy requirements, with extensive experience in applying international green certification systems such as BREEAM, LEED, and DGNB.