New Plan for Development of Green Finance in Lithuania: Public Consultations Begin

The Green Finance Action Plan for 2023-2026, being prepared by the Ministry of Finance, has reached the finish line, from Tuesday 17 January it is presented for public consultations on the E.pilietis platform. The purpose of the Plan is to promote the development of green public and private finance in Lithuania, creating a favourable environment for both business and financial market participants investing in it.

"Lithuania is taking regional leadership in the field of sustainable finance and aims to create an ecosystem that would help mobilize both public and private funds for Lithuania's green transition, which has gained special importance in today's geopolitical context. Therefore, together with policy makers from different fields, we have prepared an ambitious Green Finance Action Plan," noted Minister of Finance Gintarė Skaistė. "The concentration of these investments will help to implement important energy efficiency projects and the transition towards the use of renewable energy resources."

According to the Minister, the green transition requires enormous resources, so it is very important to efficiently mobilize both public and private resources. It is estimated that by 2030 Lithuania's transition to a green economy will require about EUR 14 billion, of which almost EUR 10 billion will be allocated by the state. The remaining share will have to be provided by private entities.

Lithuania will strive to become a regional hub for green finance, and for this purpose it is planned to establish a knowledge and competence centre – a Green Finance Institute. This institute would ensure cooperation between the public and private sectors in the development of new financial instruments and increase public awareness of sustainability and sustainable financial products.

In promoting the development of the country's green finance, the plan envisages the creation of a centralized sustainability database that would increase the availability and use of this data in the financial sector, as well as strengthen regional cooperation in order to consolidate Lithuania's position as a leader in green finance in the region. In addition, during the implementation of this plan a public sector green bond programme and other will be developed.

It is planned that by 2025 green State budget expenditure will make up to 75 % of total funds, and all public procurement will become green. It is also expected that more private funds will be attracted to implement green projects, in 2023-2024, they will amount to EUR 0.5 billion (EUR 220 million were raised in 2021-2022).

In Lithuania, the green transition is implemented through the EUR 2.225 billion New Generation Lithuania (NGL) Plan. In this Plan, as much as 43% of funds are provided for energy and green transition. Lithuania is currently negotiating with the European Commission regarding EUR 1.2 billion supplement from the EU, national and private funds to the NGL Plan, which would largely be used for the development of production from renewable energy sources.

Moreover, the new European Union Funds’ Investment Programme for 2021-2027 provides almost EUR 7.8 billion for Lithuania, of which even EUR 2.6 billion will be allocated to the green transition. 

In order to prepare the Green Finance Action Plan, the Ministry of Finance established an inter-institutional working group, which included representatives of both the public sector and the financial market. When preparing the plan, the recommendations of the European Bank for Reconstruction and Development, the goals of the Eighteenth Government Programme, the national energy and the climate action plan for 2021-2030 related to the green transition of the Lithuanian economy were taken into account.

Public consultation on the Lithuanian Green Finance Action Plan for 2023-2026 will be held on the E.pilietis platform until January 26.