Shifting towards more efficient energy use
Energy efficiency has been growing rapidly in Lithuania over the last decade; however, energy levels are still much higher than in many Member States. One way to improve energy efficiency is to modernise old multi-apartment buildings, of which Lithuania has approximately 37 000. To successfully manage this process, we have implemented financial instruments for multi-apartment building modernisation since 2009.
From the start, we have had to cope with various challenges – not only financial, but also to change the common public opinion that modernisation is ineffective. Now the figures speak for themselves, and we can gladly say: today we aim to maintain the high-quality of modernisation, as the quantity of issued loans is more than satisfying. Analysis shows that after modernisation, the consumption of energy in some buildings decreased by 50 %. However, energy efficiency could be and must be measured by more than the number of modernised buildings or the energy efficiency means implemented. It is also about quality of living and a safe and healthy environment.
Use of financial instruments
EU funds and financial instruments have been, and still are, essential for the process. In 2009 the JESSICA Holding Fund, with EUR 227 million for modernisation of multi-apartment buildings, was established. Since the use of the financial instruments in the energy sector met expectations and a number of prepared projects demonstrated a huge demand, three new funds were established under the 2014-2020 financial framework: JESSICA II, the Multi-Apartment Building Modernisation Fund (MBMF) and the Energy Efficiency Fund (ENEF).
Managed by the National Public Investment Development Agency, MBMF is a financial instrument with EUR 30 million, whereas JESSICA II is a ‘fund of funds’ (EUR 150 million) and was established to attract large private investments in order to increase the leverage of EU funds and to meet the huge demand for investment.
The newly established ENEF (EUR 79 million) has a slightly different focus – it is designed to give loans to modernise public buildings and issue guarantees for street lighting projects. The tasks of the fund encompass not only investments in projects, but also development of the ESCO model which has not been broadly implemented in Lithuania. It will attract private investments and experience of private companies in order to use EU funds more effectively and reduce risks. Currently, the Public Investment Development Agency is searching for potential investors who seek to invest in Lithuanian energy efficiency projects.
In the 2014-2020 period we want to seize opportunities to increase the return on investments of EU funds and use revolving funds as much as possible. Therefore, broader use of financial instruments is planned. In order to evaluate the opportunities and the potential for financial instruments in other public infrastructure areas, such as energy, water treatment, transport, road infrastructure, IT and others, an analysis of market needs is under development.