A large-scale energy efficiency programme for the Lithuanian housing sector received a further boost today with the signing of a third loan agreement between the European Investment Bank (EIB), as manager of the JESSICA holding fund in Lithuania, and an intermediary bank in Lithuania. The agreement was signed with Šiaulių bankas.  

The agreement with Šiaulių bankas, signed today in Brussels, makes available EUR 15 m in additional modernisation loans for energy efficiency investments in multi-apartment buildings. The facility will be used to finance up to around 100 energy efficiency projects that require additional bank financing to complement state support already committed under a previous government investment programme. The modernisation work financed under these agreements will help reduce energy consumption and enable major savings on energy bills.

This will be the second such financing agreement signed with Šiaulių bankas under the JESSICA initiative. The first financing agreement for EUR 6 m, signed in May 2010, has seen the launch of the first project. Currently, Šiaulių bankas has signed financial agreements with two home-owners associations. A home-owners association representing 36 apartments in the city of Panevėžys signed the first agreement with Šiaulių bankas on November 4 and top-to-bottom renovation work of the buildings, which date from 1958, is already under way. Two more home-owners associations are currently involved in negotiations on financing agreements with Šiaulių bankas.To date, home-owners of a total of 58  multi-apartments buildings have decided to participate in the JESSICA programme.

Lithuania’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 turning EU Structural Funds into revolving investments in energy efficiency projects in urban areas. With an initial capital committed by the Lithuanian government of EUR 227 million, this is one of the first and one of the largest such funds established in the EU to date.  It is also the first JESSICA fund, managed by EIB, to have disbursed to both intermediaries and final beneficiaries.

 “Lithuania is leading the way in the EU in implementing the JESSICA initiative and we at the EIB are happy to sign this new agreement with Šiaulių bankas, thereby making available further funds for important energy efficiency investments,” said EIB Vice-President Eva Srejber.

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. In the Baltic Sea Region, it supports a number of projects of the EU Baltic Sea Region Strategy and its four priorities:  sustainable environment; regional prosperity; increased accessibility and attractiveness; safety and security.

JESSICA (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.

Šiaulių bankas is focused on small and medium-sized business, funding of regional projects and rapid expansion of the sector of its retail banking. Šiaulių bankas has 53 territorial outlets operating in 33 towns and rendering the banking service to its clientele all over Lithuania. The entire bank's outlets work on real time on-line regime and pay much attention to the qualified servicing of the clients. The most important trend of the bank'sactivity is lending. The long-term collaboration relates Šiaulių bankas with the European Bank for Reconstruction and Development (EBRD), the Council of Europe Development Bank (CEB), Nordic Investment Bank (NIB) and other financial partners.