Hungary has gained EC approval for a €209 million investment aid in a new ‘SK On Hungary’ power plant.
Shutterstock / ETgohome
Credit: ETgohome / Shutterstock
The new plant will be built in Iváncsa, in the Közép-Dunántúl region and will manufacture lithium-ion battery cells and battery modules for electric vehicles. It is set to have an annual capacity of 30 GWh and will create at least 1,900 jobs.
According to the European Commission, Hungary first announced its intentions to grant the €209 million in December 2021.
Under the rules of Regional State aid, aid must have a real ‘incentive effect’ – as well as meet a larger roster of measures. On Tuesday, the EC announced it found the grant proposal was in line with these rules.
The commission said that without the investment, the project would simply take place in another more developed European region than Central Transdanubia. So as well as boosting jobs, the aid was seen as the minimum necessary amount to boost Hungarian investments.
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SK On Hungary’s own investment in the plant is €1,623 million. SK On Hungary is subsidiary of SK Innovation, a South Korean industrial company active in energy, chemicals, logistics, services, semiconductors and information and communications technology.
EC State Aid is given to certain companies as support, but because of the overwhelming benefits it provides, it needs to be heavily justified.
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Although the €209 million Hungarian investment seems like a huge figure, on Monday a €2 billion Austrian aid scheme, to help with the rollout of broadband networks, was approved by the commission. Similarly, on 16 March, a €1.4 billion Czech scheme to partially compensate energy-intensive companies was approved.
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