EBRD lends €10 million to boost energy efficiency improvements in Lithuania

By Nigina Mirbabaeva

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  • EBRD lends €10 million to Lithuanian Public Investment Development Agency (VIPA)  
  • Commitment follows earlier tranche of €57.5 million
  • Investment to be on-lent for energy-efficiency refurbishment of residential buildings

The EBRD is supporting the green transition in Lithuania and the development of its capital markets by extending a €10 million loan for energy-efficiency renovations in privately owned buildings across the country.  

The new loan is part of a €67.5 million package signed in 2021 with the Lithuanian Public Investment Development Agency (VIPA), which falls under the auspices of the Ministry of Finance. It follows on from an earlier €57.5 million tranche, which enabled VIPA to finance energy-efficiency renovations in around 50 multi-apartment buildings, resulting in energy savings of around 60 per cent per year. 

Rocketing energy prices and historically high inflation resulting from Russia’s war on Ukraine have made energy-efficiency upgrades even more pressing in Lithuania, a country where household energy consumption significantly outpaces the European average and inefficient Soviet-era buildings dominate the housing stock.   

The new loan will enable VIPA to finance additional comprehensive renovations of multi-apartment buildings, supporting the country’s objective of achieving building efficiency.  

The innovative financial structure of the loan – whereby repayments are matched to the repayment schedules of VIPA’s sub-loans and supplemented by European Union and national grants – enables VIPA to leverage public finance to grow its portfolio. The loan also paves the way for the agency’s future participation in the Lithuanian capital markets as it explores the securitisation of repayments to institutional and green investors.  The programme is pioneering in the region, with highly replicable potential for the other Baltic states.

Tomas Kairys, EBRD Head of the Baltic States said: “The new loan strengthens the Bank’s cooperation with VIPA and demonstrates our commitment to supporting its Apartment Building Renovation Fund programme, a portfolio that contains almost 1,000 renovation projects with a total value of around €400 million. It supports two of the Bank’s strategic priorities in Lithuania – to support the country’s green transition and strengthen its capital markets. We are delighted to continue working with VIPA and support its needs.” 

The EBRD is a major institutional investor in Lithuania. To date, it has invested almost €1.4 billion in 117 projects, with 71 per cent of them in the private sector. 

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