Apartment building renovation in Telšiai, Lithuania.
25 Apr 2022
NIB finances Lithuania’s housing renovation programme
NIB and the SB Modernisation Fund have signed a EUR 50 million loan agreement to finance a state-wide housing renovation programme to improve the energy efficiency of multi-family apartment buildings in Lithuania.
The 25-year loan supports the newly established EUR 275 million fund used by homeowers to modernise their properties. The programme envisages the renovation of 600 old apartment buildings, benefiting around 16,000 households. It aims to improve living conditions while maintaining cost neutrality through reduced energy costs for end users.
The project is expected to save 200 gigawatt hours (GWh) of energy and about 50,000 tons of carbon dioxide annually.
“Our loan supports Lithuania’s efforts to mitigate climate change and reduce energy consumption for households across the country,” says Kim Skov Jensen, NIB Vice-President & CFO. “The fund provides a new financing structure and fresh capital for renovation projects and acts as a showcase that may lead to similar initiatives in the region.”
Only projects that can achieve energy savings of at least 40% are eligible for financing from the programme. However, the outcomes of the previous renovations suggest that the savings are usually even higher, and can reach up to 70%.
“Investors focused on the newly established fund are ready to accelerate the renovation apartment buildings. We have set ourselves the ambitious goal of funding the renovation of more than half a thousand apartment buildings, which would allow residents to reduce the burden of rising heat costs and improve their quality of life. Rapid renovation of apartment buildings would reduce Lithuania’s dependence on fossil fuels, and would also make a significant contribution to the fight against climate change by reducing carbon dioxide emissions“, says Vytautas Sinius, CEO of Šiaulių Bankas, which administers the Fund.
The programme is in line with a long-term renovation strategy to transform the existing building stock in Lithuania by 2050. The strategy aims to reduce primary energy consumption by 60%, as well as to phase out the use of fossil fuels for energy and eliminate the associated CO2 emissions. Since renovation projects began, approximately 10% of old apartment buildings have been renovated in the country.
The SB Modernisation Fund is supported by a state grant and other financial mechanisms from Lithuania, as well as European structural and investment funds (ESIF). It has also received loans from the European Investment Bank, the Council of Europe Development Bank, INVL Asset Management, Swedbank and Šiaulių Bankas. The Fund is a subsidiary of Šiaulių Bankas, which is the largest commercial bank with Lithuanian capital and the country’s leading renovation financier, with 2,380 buildings already financed.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
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