National
Development Agency

The National Development Agency cancelled the assessment procedure of applications announced within the framework of the New Hungary Venture Capital Programme in the beginning of June, since 70% of applicants failed to effectively proceed through to the appraisal phase, which explicitly indicated that the call for applications needed to be reviewed and further specified. According to plans, the new call for applications will be announced on 15 July.      

Mr Márton Vági President of NDA presented the main changes made to the repeatedly announced tendering schemes at the partnership consultation held in Budapest on 7 July for the representatives of potential applicant venture capital fund organisations. Mr Vági emphasised that by taking the experiences gained during the previous procedure into account, this time round applicants can prepare for a much more transparent assessment procedure in relation to the previous one. Moreover, Mr Vági announced that a steering committee with 15 members was set up during the preparation phase – to ensure transparency and in an unorthodox manner – integrating the representatives of the professional organisation representing the venture capital sector, namely, the representatives of the Hungarian Venture Capital Association; negotiations on the possibility of integrating Transparency International are currently in progress.        

The way in which the framework made available for convergence regions has been increased by 6.5 billion HUF to a total of 36.5 billion HUF will be a key change and shall benefit enterprises receiving a share of this funding in the future. On the basis of professional feedback received, NDA has extended the investment period to the final possible cut-off date authorised in the EU programme notification document up to December 2013. Mr Márton Vági announced that the Agency has sent a letter to the management of the Hungarian Financial Supervisory Authority to request that the Authority refrain from automatically cancelling the licenses of new fund managers that we unable to commence operations due to delays encountered in the tendering procedure.  

NDA specified the rules of procedure of the calls in several regards on the basis of professional remarks made in connection with the previous call for applications. The way in which transparency shall be increasingly enforced, in relation to earlier practice, to identify the sphere of applicant owners is a key change, i.e., applicants approved funding need to issue a statement on the legitimate origin of the sources of private investments prior to contracting. It will be obligatory to submit an investor declaration of intent in this new round; moreover, the way in which applicants approved funding need to deposit 5% of their total asset contribution prior to signing the broker contract also strengthens sounder investment commitments. The transparency and professional grounds of the evaluation of applications is strengthened by how the representatives of the Hungarian Venture Capital Association, as well as experts delegated by Ernst&Young will take part in the evaluation procedure. The oral presentations of applicants will play a key role during the course of evaluation, which, according to plans, will be evaluated by a professional panel comprised of three experts delegated by the Hungarian Venture Capital Association.       

Ms Natália Gömbös, managing secretary of the 72-member Hungarian Venture Capital Association finds it relevant that NDA has integrated the profession in the preparation of the new call. As Ms Gömbös said at the forum, the association put forth a series of recommendations in connection with the draft version of the call for applications and NDA integrated several of these in the document. In addition, Ms Natália Gömbös also drew attention to how Hungary is the first member state of the 27-member state European Union to launch a this type of a programme, the success of which is the joint responsibility of the organisations announcing the call and future approved funds managers. 

As regards the application schedule, Mr Márton Vági announced that it will be possible to announce the call on 15 July as the outcome of the lengthy preparation work. According to plans available at present, 28 August will be the deadline date for application submission, which means that the evaluation procedure is expected to be completed by the beginning of October.    

All concerned parties are invited to make remarks in connection with the draft version of the call on the NDA website (www.nfu.hu) up to 12 noon Friday, 10 July. The Agency shall review recommendations received in writing on the same day in the afternoon within the framework of an evaluation meeting; consequently, NDA shall finalise the draft version of the call to be announced on 15 July by taking professional recommendations made into account.