We all know the challenges to decarbonise the building stock in Europe as part of the EU’s objective of meeting its Paris climate obligations. Financing is fundamental and there is a growing array of initiatives from the Energy Efficiency Financial Institutions Group (EEFIG), the Sustainable Energy Investment Forums, Smart Finance for Smart Buildings and much more. The role of development banks such as the European Investment Bank is also key. It is encouraging to read about a new agreement by the EIB on the Emerging Europe website.
EIB and Šiaulių Bankas sign new energy efficiency finance deal
The European Investment Bank (EIB) and Šiaulių Bankas have signed a guarantee agreement to continue and renew their funding for energy efficiency renovations of Lithuanian multi-apartment buildings. The EIB will provide a 30 million-euro guarantee from the European Regional Development Fund (ERDF) for a portfolio of 150 million euros in loans by Šiaulių Bankas to homeowners for the modernisation of their properties.
Technically, the operation is the first guarantee under the Lithuanian Leveraged Fund that was established in 2016 to maximise the funds available for the modernisation programme, which is a key government priority. With it, the Lithuanian financing situation has seen an evolution from using financial intermediaries as agents to disburse ERDF and national funds, to an ERDF-backed guarantee to banks, who will use only their own funds to give out modernisation loans. This final step will greatly improve the leverage of this financing, maximising the number of households that can receive cheaper loans.
“The beginning of the Leveraged Fund’s activity is a significant step forward in the history of the multi-apartment building modernisation programme’s financing,” said Reda Brandisauskiene, Lithuania’s vice-minister of the environment. “The fact that private capital funds are invested in the governmental programme demonstrates great confidence by the commercial banks, which in turn ensures a more effective and stable financing of the programme.”
“Nearly 50,000 Lithuanian households have already been able to lower their energy bills through the multi-apartment modernisation programme, of which the EIB was one of the first supporters,” said EIB Vice President Alexander Stubb. “Through this new agreement we will make available more financing for those who want to refurbish their homes to a higher standard of energy efficiency.”