ILTE activities are improved and strengthened for more effective and more transparent funding of infrastructure projects of national importance
At today’s meeting the Government endorsed the proposal of the Ministry of Finance to strengthen ILTE UAB, increasing its authorised capital by EUR 150 million. Also, the amendments to the Law on the National Development Bank governing the activities of this company were approved. The amendments will allow more effective and more transparent management of the company, considering the recommendations made by the National Audit Office and publicly expressed criticisms.
The draft law proposes new regulation of the promotional financing activities, provides for the grounds on which the authorisation to perform such activities is granted, and also aims to clarify the requirements for the National Development Bank (NDB) and to establish the right of the NDB to receive data from information systems, as defined in the Republic of Lithuania Law on the Management of State Information Resources. Also, the clarification is made concerning the provisions on the use of temporary idle NDB’s funds and dividends. Other editorial corrections have been made.
“The proposals are made also taking into account the recommendations of the National Audit Office and the criticisms publicly expressed on several occasions regarding the activities of the National Development Bank”, Minister of Finance Rimantas Šadžius said.
The implemented amendments, if the latter will be approved by the Seimas, will ensure the funding from the National Development Bank to be provided exclusively to projects (customers) consistent with the requirements set and the funds to be used in accordance with the purpose of financing. This legal regulation will not only contribute to the improvement of the operational efficiency of the NDB, but will have a significant impact on the management of the risks associated with the funded projects.
Investment of state assets in authorised capital of ILTE UAB will ensure the funding needs of cost-effective infrastructure projects implemented in Lithuania in the sectors, which currently are underfinanced. For this purpose, a range of long-term, sustainable financial instruments will be created to finance projects in energy, defence infrastructure and industry, transport, digitalisation, social and local or regional infrastructure areas.
After the investment of EUR 150 million of public capital, ILTE will have to attract at least EUR 850 million from private investors.
With increasing authorised capital and attracted private investors, the efforts will be made to finance business and public sector needs in effective and qualitative manner.
“I see ILTE as one of the basic instruments for strengthening the national economy and investing in large scale infrastructure projects. Additional state contribution to ILTE will allow to attract much more private funds for investment and to contribute more significantly to funding of projects of national importance”, R. Šadžius added.
The proposed amendments to the law aim, inter alia, to reduce the administrative burden and to respond more quickly to market needs, thus creating more favourable investment opportunities that foster business development.
Strengthened ILTE equity capital and more flexible use of disposed funds will offer the possibility of funding the projects on more favourable terms and ensuring the development of the NDB’s promotional financing activities.
To date, the multiplication effect generated by ILTE in the administration of financial instruments has been approximately 1:1.2, and the aim is to significantly increase the added value of NDB’s activities and this ratio to 1:4. This can be achieved through active cooperation with other financial institutions, borrowing on capital markets and onlending financial resources.
The authorised capital of ILTE UAB will be increased from appropriations approved for the Ministry of Finance for 2025–2027.
Currently, the authorised capital of the company amounts to EUR 203.4 million and represents 0.28 %, and total capital accounts for 0.3 % of Lithuania's gross domestic product (GDP).
An analysis of similar national development institutions operating in Europe shows that the level of capital of other development banks fluctuates around 0.5–1% of GDP: Therefore, this public contribution of EUR 150 million (increasing by EUR 50 million over three years) will allow ILTE to move closer to the capitalisation ratios of other European national development banks.
The amendments proposed by the draft law also establish the provision that the profits of ILTE UAB shall not be used to pay dividends, which will lead to the fact that the NDB’s profits will be allocated to the accumulation and/or increase of NDB’s reserves, to the strengthening of equity capital, to the fulfilment of functions, objectives and tasks. The aforementioned amendment will significantly contribute to the enhancement of the NDB’s credit ratings, sustainability, operational development and efficiency, strengthen the independence, financial resilience and stability of ILTE and will ensure the NDB’s ability to operate outside the general government sector.
The audit report on UAB ILTE, drawn up by the National Audit Office on 4 April 2025, notes that the consolidation of national development institutions allows to increase funding for priority areas of activity, to increase the volume and availability of funding.
Implementing the recommendations of the National Audit Office, the performance of an independent supervision of prudential internal management and control measures of activities of ILTE UAB and compliance with the requirements is further improved. Also, for more efficient use of the State budget funds, the legal framework enabling the decisions on the use of temporarily idle funds for other financial instruments is also being reviewed.
The National Audit Office revealed that in developing the promotional financing of ILTE UAB, an independent prudential supervision of promotional financing activities should be also improved. This supervision is carried out in analogous organisations in France, Germany, Poland and other countries.
It is planned that by 2030 the National Development Bank ILTE will finance infrastructure projects of strategic importance to the State for EUR 1 billion.
100% shares of ILTE UAB are owned by the State of Lithuania.
Last updated: 19-08-2025
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