01-12-2023

Minister of Finance G. Skaistė signed an agreement with the European Commission on the supplement to the plan "New Generation Lithuania"

Today, Minister of Finance Gintarė Skaistė officially signed an agreement with the European Commission (EC) on the supplement to the plan "New Generation Lithuania", which was endorsed by the Council of Economic and Financial Affairs (ECOFIN) in Brussels at the beginning of November. The supplemented plan "New Generation Lithuania" includes the new investments of EUR 1.7 billion, including measures for business, green, innovative, digital technologies, production and export of high value-added products, cyber security, renovation of apartment buildings, development of clean transport and production of renewable energy resources.

“The plan "New Generation Lithuania" and its supplement are important in the context of the current geopolitical reality, which is why we not only almost double the total scope of the plan to EUR 3.85 billion, but we also double our ambition by 2030 to produce the entire amount of electricity required by the state from renewable energy sources. The new measures will not only strengthen our energy independence, but also contribute to the competitiveness of the Lithuanian business," noted the Minister of Finance.

According to Minister of Finance G. Skaistė, the most significant new investments are planned to be concentrated in two areas: EUR 1 billion is allocated to loans and other financial instruments to businesses, and more than EUR 550 million – to the production of electricity from renewable energy sources.

The plan "New Generation Lithuania" was supplemented by taking into account the geopolitical situation, Lithuania's new ambitions in the field of renewable energy, intensive discussions with social and economic partners and the new REPower EU initiative amounting to EUR 198.4 million granted to Lithuania by the European Commission.

According to experts, it is expected that due to the new investments of the plan "New Generation Lithuania", in the period 2023-2027, a faster growth of the real gross domestic product (GDP) will be ensured, on average by 0.97 % or EUR 492.5 million per year.

Investments in industrial greening

The updated plan “New Generation Lithuania” creates a new long-term financing instrument of up to EUR 1 billion, which will provide more opportunities for business. The new financing mechanism will open flexible options for businesses that were not available before. Until now, there has been no instrument of such scope in Lithuania.

The mechanism will be issued as a financial instrument in the form of loans, so the funds will return. Companies of all sizes – small, medium and large – will have access to funding. Businesses that want to finance development, create, and export products with high added value, and implement advanced, digital and environmentally friendly technologies will be able to apply. This will help create well-paid jobs and ensure long-term sustainable growth of the Lithuanian economy.

In addition, opportunities for obtaining investment loans for the improvement of products of the defence and security industry sector, for the creation of innovations in these areas, responding to the geopolitical and security contexts, are foreseen.

The financial instrument is constructed in such a way that the state, through the National Development Institution (UAB "Investicijų ir verslo garantijos" (INVEGA)), finances projects together with the private sector, thus ensuring that the projects funded are profitable and economically justified.

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Additional investments for priority areas

In the face of current challenges, we double our ambition by 2030 to produce the entire amount of electricity required by the state from renewable energy sources. Therefore, taking advantage of the supplement of the plan “New Generation Lithuania”, the implementation of the 1 gigawatt (#1gigavatolaisvei) project will be accelerated. This is a project that not only has the component of combating climate change, but also brings Lithuania closer to energy independence.

russia's war against Ukraine fundamentally disrupted the global energy system. As currently local electricity generation in Lithuania provides only about a third of the country's electricity needs, Lithuania is accelerating investments in electricity production from renewable sources. Therefore, a significant part of the plan "New Generation Lithuania" loans and grants from the State budget (more than EUR 550 million in loans and EUR 206 million in grants) is channelled to the energy sector, ensuring Lithuania's energy independence.

Funding for the development of renewable energy sources is planned to be allocated to three target groups: legal entities (businesses), renewable energy communities, especially those facing energy poverty, and municipalities and central government. About 90 % of these funds will be allocated to solar power plants, and there will also be an opportunity to invest in onshore wind energy production and, if necessary, purchase an energy storage facility.

The updated plan "New Generation Lithuania" foresees other additional investments for the renovation of buildings and the strengthening of the national cyber security and the purchase of clean transport.

Please note that on 14 May 2021, at the meeting of the Government ministers, a protocol resolution was adopted unanimously approving the submission of the plan "New Generation Lithuania" to the EC. On 30 June 2023, the Government approved the draft modification of the plan "New Generation Lithuania", which was submitted to the European Commission, and on 23 October 2023, the EC adopted a positive assessment regarding the supplementation of the Plan with the new investments.On 9 November, the Economic and Financial Affairs (ECOFIN) Council in Brussels endorsed the plan "New Generation Lithuania" supplemented with the new investments of EUR 1.7 billion.