27 Mar 2024

NIB finances renewable energy supply for green ammonia production in Lithuania

NIB and UAB LT Energija have signed a EUR 100 million loan for a 264 MW wind farm in Pagėgiai, Lithuania. The European Union supports EUR 43.5  million of the loan under the NIB’s InvestEU Framework Operation on Clean Energy Transition.

The 21-year maturity loan will finance the construction of 40 wind turbines, as well as the associated civil and electrical infrastructure.

The Pagėgiai wind farm will significantly increase energy generation capacity in Lithuania, which currently imports the majority of its power consumption. It will generate an estimated 602 GWh of renewable energy annually, representing approximately 15% of the country’s current total power production.

All the generated electricity will be purchased by AB Achema, the largest producer of fertilisers in the Baltics. The company plans to use renewable energy to produce green hydrogen, which will be further utilised to produce green ammonia.

Currently, Achema’s two ammonia production units represent around 80% of the company’s total CO2 emissions. By substituting part of the natural gas consumption with renewable electricity, the company expects to significantly cut the emissions in this hard-to-abate sector.

Moreover, assuming the electricity from the wind farm replaces energy produced with an average carbon footprint in the European Union, the avoided greenhouse gas emissions associated with the project will amount to around 202,000 tonnes of CO2 per year.

“This loan is in line with both our mandates – to improve productivity and benefit the environment,” says André Küüsvek, NIB President & CEO. “Not only will it help Lithuania build up its renewable energy capabilities, it will also reduce reliance on natural gas imports and advance the development of green technology, positively affecting the entire region.”

“Renerga is the founder of renewable energy in Lithuania. Pagėgiai project is important continuation of our strong traditions and commitments to renewables. We believe that this project is a very significant step forward both for our renewables group as well as the Lithuania’s renewable energy goals in general,” says Lidija Lubienė, Chair of the Board of Achema Group.

“I welcome this agreement that will not only boost Lithuania’s energy independence by significantly increasing its renewable energy production capacity. It also paves the way for green growth and environmental sustainability across the Baltic region. Thanks to today’s new InvestEU agreement together with the Nordic Investment Bank, we will give a further boost to economic resilience and sustainable growth in Europe,” comments Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People.

The wind farm is expected to commence commercial operations in the third quarter of 2026. The estimated total project cost is EUR 460 million.

The project is being developed by UAB Renerga, the Achema Group-owned renewable energy company. The Borrower, LT Energija UAB, is an SPV established to develop and operate the project.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition.

The InvestEU Fund is implemented through financial partners that invest in projects using the EU budget guarantee of EUR 26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least EUR 372 billion in additional investment.

NIB and the European Commission have signed InvestEU guarantee agreement in 2022, which was amended in 2024. The agreement is set to unlock up to EUR 994 million of NIB financing for sustainable infrastructure, research, innovation, and digitalisation, potentially mobilising public and private investments totalling around EUR 3 billion. Read more at NIB and InvestEU.

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.

For further information, please contact:
Martin Lundström, Associate Director, Project Finance, at +358 10 618 0426, martin.lundström@nib.int
Vytautas Brazaitis, Communications Officer, at +358 10 618 0235, vytautas.brazaitis@nib.int

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