EIB and Šiaulių agree funding for refurbishing Lithuanian homes



Continuing a longstanding cooperation, AB Šiaulių bankas and the European Investment Bank (EIB) have signed a EUR 68 million operational agreement under the Jessica II fund which will support the refurbishment and modernisation of around 350 multi-apartment buildings in Lithuania. In addition, Šiaulių bankas agreed to provide EUR 30 million of the bank’s resources for the refurbishment of a further 125 multi-apartment buildings.

In May this year the EIB was appointed manager of the EUR 150 million “Jessica II” fund, destined towards energy efficiency modernisation of residential buildings under the Lithuanian government's “Multi-apartment buildings Modernisation (Renovation) Programme”. In its first agreement with a financial intermediary under the 2014-2020 EU regulations for Decentralised Financial Instruments, the EIB selected AB Šiaulių bankas for the disbursement of EUR 68 million in preferential loans to home owners. As in previous operations, the residents will pay a fixed interest rate of 3% annually for the modernisation loans.

Chief Executive Officer of Šiaulių bankas Vytautas Sinius said: “Šiaulių bankas has been involved in renovation processes for more than 15 years – modernisation of housing is a priority among the bank’s activities. The new financing reaches Lithuania at exactly the right time – residents are especially willing to take out loans for multi-apartment building modernisation, agreements are being made with the contractors and companies administrating the renovation projects – we are making every effort to ensure that each step of the renovation process goes smoothly and quickly.”

The “Jessica II” fund continues the support for energy efficiency investments in Lithuania which can cut energy bills in hundreds of Lithuanian multi-apartment buildings while improving energy security. The number of proposed projects, however, exceeds the financing put forward by the fund. As such, Šiaulių bankas is making EUR 30 million of its own funds available, enabling the renovation of a further 125 multi-apartment buildings. This provides a vital contribution to the Modernisation Programme’s resources until a second selection procedure for Financial Intermediaries can be carried out.

EIB Vice-President Pim Van Ballekom, responsible for operations in the Baltic countries, added: “The commitment by Šiaulių bankas shows the importance of the “Jessica II” programme. Not only are we very happy to have them on board as the first intermediary bank in the programme, but the fact that Šiaulių has itself also freed up funds for these activities will allow even more people to refurbish their houses and cut energy bills, improving quality of life for many Lithuanians.”

According to the Public Company Housing Energy Efficiency Agency, currently 1280 old multi-apartment buildings are undergoing modernisation works, with a total of EUR 240 million worth of agreements made in the construction sector.

Lithuanian Minister of Environment Kęstutis Trečiokas stated: “At the moment the renovation process is moving fast across all of Lithuania, so the additional funds are especially important in implementing the “Multi-apartment Building Modernisation Programme” while contributing to the state’s economic development. We very much welcome the agreement for the additional funds signed by Šiaulių bankas, with their extensive experience in the sector. This will not only help implement the renovation process but will also act as an example for other financial institutions. The Ministry of Environment of Lithuania will ensure that every effort is made so that the programme will be carried out successfully. In the future it is intended to expand the programme and move on from individual projects to the implementation of instruments that improve energy efficiency for selected neighbourhoods.”

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2014, the EIB provided loans in Lithuania totalling over EUR 80m with SMEs and energy sector being the major beneficiaries.

Šiaulių bankas is the leader of multi-apartment building modernisation in the Lithuania. Until now the bank has signed 573 credit agreements for EUR 111 million under the new financing programme, and it has preliminary agreed to finance an additional 580 projects worth EUR 153 million. Šiaulių bankas was the first partner of European Investment Bank in Lithuania in providing preferential loans for modernisation, and is also the only financial institution to contribute its own funds to this successful programme, providing EUR 20 million at the end of last year.