- As a fund manager together with the Lithuanian government, the EIB will provide a €90 million loan for the newly created SB Modernisation Fund
- The fund plans to renovate 600 old apartment buildings, improving the living conditions of 16 000 households
Together with the Lithuanian government, the European Investment Bank (EIB), as the European Regional Development Fund (ERDF) manager, is providing a €90 million loan to the newly established SB Modernisation Fund, a subsidiary of Šiaulių Bankas. The fund will receive a total of €275 million in loans from Lithuanian and foreign financial institutions, such as the Council of Europe Development Bank, INVL Asset Management, Swedbank, Šiaulių Bankas and Nordic Investment Bank.
The fund has already started operations and plans to renovate 600 old apartment buildings, improving the living conditions of 16 000 households. The project is expected to save 200 gigawatt hours (GWh) of heat and about 50 000 tonnes of carbon dioxide annually.
This financing follows a guarantee agreement signed in January to create a loan portfolio of €75 million for another 7 000 households.
Vytautas Sinius, Chief Executive Officer of Šiaulių Bankas, said: “Investors focused on the newly established fund are keen to accelerate the renovation of apartment buildings. We have set ourselves the ambitious goal of funding the renovation of more than 500 apartment buildings to reduce the burden of rising heat costs for residents and improve their quality of life. The rapid renovation of apartment buildings will reduce Lithuania's dependence on fossil fuels, and also make a significant contribution to the fight against climate change by reducing carbon dioxide emissions.”
According to Sinius, the new fund is a unique financial instrument designed to attract private financing for renovation in Lithuania. The structure of this fund will create significant synergies, attracting private capital to increase the state funds allocated for funding renovation projects up to five times.
EIB Vice-President Thomas Östros said: “With this agreement, we are making more funding available for those who want to refurbish their homes to a higher standard of energy efficiency. Renovating the EU building stock will improve energy efficiency while driving the clean energy transition. Combining the efforts and expertise of private stakeholders and international financial institutions is crucial for achieving the goals of climate action.”
Lithuanian Minister of Environment Simonas Gentvilas said: “Lithuania’s long-term renovation strategy envisages the renovation of the majority of old apartment buildings by 2050, of which as many as 66% are in energy classes D and lower. The strategy aims to reduce primary energy consumption by 60% and completely eliminate the carbon footprint. The modernisation of old apartment buildings can significantly reduce the consumption of energy resources and strengthen Lithuania’s energy independence, especially by reducing the import of energy resources from Russia.”
Gytis Žakevičius, advisor to the Minister of Finance, said: “The investment platform is an excellent example of how green investments are able to attract the resources and expertise of international financial institutions such as the EIB to create innovative instruments and unlock the investment potential for investors in Lithuania to finance strategic areas of the economy. The Ministry of Finance expects this financial instrument to attract even more private capital, thus reducing the need for EU structural funds. This initiative will contribute to the use of sustainable public finances, cut heating bills for residents, and reduce the energy dependency on fossil fuel sources and the adverse effects of climate change.”
Šiaulių Bankas, in cooperation with the EIB, has been participating in apartment building modernisation programmes for more than ten years and occupies more than 60% of this market. During this period, modernisation loans were signed for more than €720 million (of which more than €520 million are own funds of Šiaulių Bankas), with the bank providing funding for 2 380 apartment buildings.
Background information
As the EU climate bank, the EIB has committed to support €1 trillion of climate action and environmental sustainability investments in the next decade.
AB Šiaulių Bankas is the largest Lithuanian capital bank. A steadily and consistently growing financial partner, it focuses on business and consumer financing solutions, serving customers in 37 Lithuanian cities. The bank’s shares are listed on the NASDAQ Baltic Main List.
