Monitoring of EU funding for renewable energy in Hungary

Subject: Monitoring of EU funding for renewable energy in Hungary

Corruption and misappropriation of EU funds by Member States are a cause of serious economic damage for all European citizens and undermine joint solidarity in the EU. Recent investigations by the European Anti-Fraud Office (OLAF) have shown that Hungary has repeatedly misused EU funds in ways that benefit individuals instead of all Hungarian citizens.

Following investigative journalism carried out by the German news website Spiegel Online, new corruption allegations have been raised with regard to the company EcoSolifer, for which Hungary had received approximately EUR 6 million in EU funds to build a solar panel factory in the town of Csorna.

Even though the factory was supposed to be operative as from the end of 2015, journalists have reported that the facility is still empty and there are no signs of work taking place.

1. Is the solar panel factory operating, and if not, what reasons are given by the Hungarian authorities?

2. To what extent can the Commission confirm that the EU funds allocated to the Hungarian authorities have been used in the way and for the purposes foreseen?

3. Are there any official reports from the Hungarian authorities indicating how the EU funding was used?

Answer given by Ms Creţu on behalf of the European Commission

(17 September 2018)

European Structural and Investment Funds (ESI Funds) are implemented under shared management and the responsibility for project selection lies with the national managing authorities.

Projects are subject to regular checks and on-the-spot visits. Projects that are not in line with programmes objectives or are otherwise not eligible, should not receive funding.

The applicable legislation lays down comprehensive rules to ensure that projects can retain a contribution from the ESI Funds only if that operation does not undergo a substantial modification within five years from the completion of the operation, meaning that a non-functioning factory would be obliged to return any unduly paid sums.

The Managing Authority responsible for the Economic Development Programme (2007-2013) and the projects co-financed under that programme informed the Commission services that the undertaking at issue (EcoSolifer Kft) is subject to a financial correction procedure. This procedure, however, is suspended due to an ongoing investigation at national level and no further information can be disclosed at this point.

In the framework of the ongoing closure of the Economic Development Programme (2007-2013), in March 2018 the Hungarian national authorities submitted a report on the status of the ongoing and closed financial correction procedures, including the suspended procedure regarding the company at issue.

The Commission services are currently assessing the submitted closure documents.