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 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. To accelerate the pace of renovations, the European Commission recently launched the Renovation Wave Strategy, which aims to at least double renovation rates in the next ten years and ensure they lead to higher energy and resource efficiency.
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.
The loan is provided to the Lithuanian Public Investment Development Agency (VIPA), a National Promotional Institution owned by the Ministry of Finance, and will be on-lent to the Apartment Building Renovation Fund (ABRF), an energy efficiency (“EE”) lending platform administered by VIPA. It follows a €50 million EBRD loan in 2017 to VIPA for energy efficiency and rehabilitation investments in apartment buildings that contributed to average energy use reductions of 62 per cent for homeowners’ associations.