EUR 360 Million of the Plan “Next Generation Lithuania” Will Reach Lithuania
The European Commission (EC) welcomed Lithuania’s first loan payment request of the supplemented plan “Next Generation Lithuania”. It is planned that after receiving a positive assessment by the EC in accordance with the ordinary proceedings, Lithuania will receive EUR 360 million in April 2024.
“We have repeatedly noted that the plan consists not only of investments, but also of reforms, the implementation of which usually requires political will. We are confidently moving forward implementing the necessary steps for Lithuania, this time in the areas of social security, health system, national defence and green finance. Thanks to these reforms, we will soon receive funds for further investments for both business and people, which will increase the growth potential of Lithuania's economy, resistance to future shocks, expand the use of renewable energy resources, increase energy efficiency and cyber security”, stressed Minister of Finance Gintarė Skaistė.
The distinctiveness of the plan "New Generation Lithuania" is that the funds are not paid out for incurred project costs, but only when the indicators are met. The progress of the plan is monitored periodically, together with experts from the European Commission. After submitting a payment request, the EC usually assesses it within two months, and on the basis of this assessment, with the approval of the EU Council, funds are allocated. In the case of Lithuania - for the first 5 indicators of the loan tranche.
The planned funds of almost EUR 400 million, which are to reach Lithuania in April 2024, will be used to finance the planned measures of the supplemented plan “Next Generation Lithuania”: where EUR 1 billion for the purchase or development of green, digital and innovative business technology that would create high added value and be export-oriented, and an additional more than EUR 550 million – for the production of electricity from renewable energy sources. More details are available here.
Specific implemented indicators:
The cooperation between the Employment Service and municipalities in providing tailored services and consultations for both job seekers and those preparing for the labour market was reformed. Amendments to the legislation ensured that the Employment Service, using the case management method, will provide tailored services and consultations to the unemployed and registered persons preparing for the labour market who face employment challenges. Municipalities, in cooperation with the Employment Service, will implement employment incentive programmes. Specific assistance provided by the Employment Service and municipalities will help a person preparing for the labour market to solve problems limiting employment and to successfully integrate into the labour market.
The established Centre for Improving the Competences of Social Workers organises and conducts regular, free training, provides methodological guidance, supports new social workers in their professional activities. When social workers improve their professional competences, the individualised assessment of the need for social services is carried out more efficiently, as well as the selection of personal assistance measures, and inter-institutional cooperation is improved.
The Green Finance Action Planhas been approved, the actions of this plan will not only mobilise public and private finances to achieve the goals of climate change mitigation and adaptation to climate change, but also increase Lithuania's attractiveness to investors investing in green financial products. At the same time, the goal of Lithuania becoming a leader in the Baltic region in the field of green finance is being implemented. After the implementation of the plan, the share of the State budget green expenditure will reach 50 % of total State budget expenditure in 2026. An additional EUR 900 million of private funding for the implementation of green projects is expected to be mobilised by the end of 2026.
The Guidelines for the Development of the Defence and Security Industry 2023-2027 has been adopted to create a more favourable environment for the development of the defence and security industry and the development of new defence products, to stimulate the development of the defence and security industry sector, and to maintain critical defence technology and strategic competences in the country. The implementation of the guidelines will increase the international competitiveness of Lithuania’s defence and security industry, create greater added value and promote exports.
A plan for centralisation of procurement of health institutions and agencies has been adopted, the centralisation of procurement under the new procedure starts in 2023: public procurement by contracting authorities in the health sector, with the exception of low value procurement, will be carried out through the central contracting authority CPO LT. Centralised procurement in the health sector will reduce the administrative burden as it will result in more professionally prepared procurement documents, more unified procurement requirements that will make it easier for businesses to adapt to. Moreover, centralisation of public procurement in the health sector will contribute to professionalisation of public procurement, reduction of corruption risks, allow for a more efficient use of the State budget funds, standardisation of processes, which will make them more attractive to businesses participating in procurement in this sector.
Experts estimate that the new investments of the plan “Next Generation Lithuania” over the period 2023-2027 will ensure faster real GDP growth of 0.97 per cent or EUR 492.5 million per year on average.
The value of the loan payment request under the supplemented plan “Next Generation Lithuania” is EUR 387 million in total, but the funds will be disbursed pro rata after deduction of the advance already paid out.
Please note that just at the meeting of the Government Ministers on 14 May 2021, a protocol resolution was adopted to unanimously approve the submission of the plan “Next Generation Lithuania” to the European Commission. On 30 June 2023, the Government approved the draft amendment of the plan “Next Generation Lithuania” submitted to the EC and a positive assessment of the EC regarding the supplement of the plan with new investments was receivedon 23 October 2023. On 9 November, the Economic and Financial Affairs (ECOFIN) Council in Brussels approved the plan “Next Generation Lithuania” supplemented with EUR 1.7 billion of new investments.
Last updated: 27-02-2024
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