Energy consumption in Lithuanian apartment buildings is expected to be reduced thanks to a loan agreement signed today between the European Investment Bank (EIB), as manager of the JESSICA holding fund in Lithuania, and Swedbank. The fund will lend to energy efficiency investments in multi-apartment buildings.

Swedbank will provide modernisation loans for energy efficiency for a total amount of EUR 6 million (over LTL 20 million). Apartment owners in multi-apartment buildings can apply for 20-year loans with low and stable interest rates which must be used for energy efficiency investments. These investments potentially allow for a significant reduction in energy consumption and thus enable considerable savings on energy bills.

The Lithuanian government’s JESSICA holding fund, managed by the EIB, was established by the Ministry of Finance and the Ministry of Environment of Lithuania in June 2009 as an effective way of deploying EU Structural Funds for energy efficiency investments. The initial capital committed by the Lithuanian government to the JESSICA holding fund is EUR 227 million. This is one of the largest and one of the first JESSICA holding funds established.

The loan agreement between the holding fund and Swedbank was signed today in Vilnius in the presence of Minister of Environment Gediminas Kazlauskas by Eva Srejber, EIB Vice-President, and Antanas Danys, head of Swedbank Lithuania.

“The EIB is happy to be signing this important agreement with Swedbank, which is a leading bank in Lithuania and in the Baltic Sea region”, Ms Srejber said.

The JESSICA fund loan agreement with Swedbank is the second such agreement in Lithuania.

Background notes:
The mission of the EIB, the European Union’s bank, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investments.

(Joint European Support for Sustainable Investment in City Areas) is one of the Cohesion Policy Joint Initiatives that were developed by the European Commission to contribute to making EU Cohesion Policy more efficient and sustainable. The JESSICA mechanism is based on cooperation between the Commission, the EIB and the Council of Europe Development Bank (CEB) and supports investments in sustainable urban development and regeneration.

This initiative, designed to increase the use of financial engineering instruments, allows Managing Authorities to use some of their European Structural Funds allocations to invest in revolving funds rather than providing one-off grant financing. By so doing, the Authorities can recycle financial resources in order to enhance and accelerate investment in urban areas. These investments, which may take the form of equity, loans and/or guarantees, are delivered to projects via Urban Development Funds and, if required, Holding Funds.

Swedbank has 9.5 million retail customers and 650,000 corporate customers, with 362 branches in Sweden and 222 branches in the Baltic countries. The Group is also present in Copenhagen, Helsinki, Kaliningrad, Luxembourg, Marbella, Moscow, New York, Oslo, Shanghai, St. Petersburg and Tokyo. In June 2010, the balance sheet amounted to SEK 1,905 bn (EUR 200 bn) and the number of employees totaled about 17,500.