Addressing a core issue in the effort to improve the use of energy in Lithuania, the European Bank for Reconstruction and Development (EBRD) is lending 67.5 million euros to support an innovative scheme to scale up renovation of residential multi-apartment buildings – its largest direct investment in renovating privately owned buildings in the country.
Renovation of buildings is essential for the decarbonisation of economies. It was singled out in the European Green Deal as a key initiative to drive energy efficiency in the sector and deliver on climate objectives.
The loan is expected to improve the energy performance of old residential buildings in Lithuania by a minimum of 40 per cent and achieving a minimum energy performance class C. It supports an innovative approach to accelerating the pace of building renovation through a combination of long term debt financing, incentives, technical assistance and support for low-income households.
It also aims to benefit small and medium-sized buildings renovations enterprises (SMEs), which have been hard hit by the COVID-19 pandemic, by offering revenue-generating opportunities.
“This is the EBRD’s first investment to tackle refurbishing multifamily apartment buildings at scale using a structured finance approach – a unique approach that we are trying to replicate in other countries,” said Nandita Parshad, Managing Director of the EBRD’s Sustainable Infrastructure group, at the signing.
“We look forward to a long-term partnership with the EBRD,” added Gvidas Dargužas, CEO of the Lithuanian Public Investment Development Agency (VIPA) which is receiving the loan. “The Apartment Building Renovation Fund managed by VIPA is designed to ensure stable financing of apartment building modernisation projects and this second EBRD loan helps us to continue to successfully implement this important goal for the Lithuanian people.”
Lithuania has a housing stock of some 38,000 apartment buildings, housing around 66 per cent of the population, with approximately 35,000 built in the Soviet era. To date, only around 4 per cent of apartment buildings have been renovated while the vast majority remains in urgent need of an upgrade to reduce energy consumption.