Orbán cabinet gets rid of foreign competitors in this skyrocketing economy branch – UPDATED

In the last few months, Spanish, Danish and German companies would have invested in Hungary to extend their portfolio in the skyrocketing solar power industry. However, the government introduced a new regulation which makes it almost impossible for a foreign company to invest in Hungary.

According to 24.hu, the Hungarian state has preemptive rights concerning the solar power industry, provided a foreign company aims to buy a Hungarian firm active in the sector. The decision-maker is the energy minister, so it is almost impossible for foreign companies to enter the market.

Protectionism in that regard is not entirely new in the European Union. For example, Germany and France both protect their solar energy market, but the rules are clarified in their legal system. Therefore, there is theoretically a good chance that foreign companies might become successful there, 24.hu wrote.

In Hungary, the biggest solar plant owners are government-close businessmen. In the first position, there is a group of companies connected by their seat: 122–124 Pasaréti Street, an office building in Budapest’s prestigious Buda region. That is the headquarters of István Tiborcz’s BDPST Group. Mr Tiborcz is PM Orbán’s son-in-law.

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Government-close companies in the skyrocketing solar energy sector

Nine companies operate in the building, owned by three private equity funds (Voyager One and Two, and Central European Opportunity). However, these companies provide 2% of the entire Hungarian electricity production. All were started by Adnan Polat, a Turkish billionaire who regularly makes deals with Mr Tiborcz.

The second firm in the Hungarian market is the MVM Group. They have been acquiring solar parks one after the other in the last few years.

According to 24.hu, the majority of the ten biggest Hungarian solar power firms are not yet profitable. Their assets are worth HUF 540 billion (EUR 1.4 billion), but they were able to realise only HUF 15 billion (EUR 38 million) profit in 2022.

That is a clear sign of why that business sector is astonishingly capital-intensive.

Therefore, Hungary could make good use of inflowing foreign capital, helped even by the European Union. For example, the Spanish ID Energy Group announced last summer that they would like to buy 67 European projects with the help of a European credit fund (in the arlier version of this article we wrote erroneously that with the help of EU funds – DNH editors). In Hungary, they would like to buy a capacity of 250 megawatts, 24.hu wrote. UPDATE 2: ID Energy Group wrote us that their strategic aim was developing greenfield projects, which is their main focus concerning their ongoing projects.

24.hu wrote that the Orbán cabinet would not like competitors in the market. Therefore, the cabinet declared that the Hungarian state would have preemptive rights concerning the sector. Csaba Lantos, Hungary’s energy minister, will decide about possible foreign acquisitions. Mr Lantos came from the MET Group, a key player in the Hungarian and European energy sector.