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Renovation of Multi-Family Houses Will Be Financed by New Established Fund

Date

2009 06 11

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Renovation of Multi-Family Houses Will Be Financed by New Established Fund
Renovation of Multi-Family Houses Will Be Financed by New Established Fund
Vice-President of EIB Matthias Kollatz-Ahnen, Minister of Finance Algirdas Šemeta and Minister of Environment Gediminas Kazlauskas Vilnius, June 11. Today, at the Ministry of Finance, Minister of Finance Algirdas Šemeta, Minister of Environment Gediminas Kazlauskas and Vice-President of the European Investment Bank (EIB) Matthias Kollatz – Ahnen signed the financing agreement.

This agreement establishes the Holding Fund, the funds of which will be invested into the renovation of multi-family houses. LTL 785 million of the EU Structural Funds assistance and national co-financing funds are planned to be transferred to the Fund.

The Holding Fund is formed implementing JESSICA Initiative (Joint European Support for Sustainable Investment in City Areas) of the European Commission, European Investment Bank and the Council of Europe Development Bank. The aim of the Initiative is to attract investment in sustainable urban development by exploiting financial engineering instruments. Lithuania will become one of the first states in the European Union, where JESSICA Initiative will be launched.

“Establishing the Holding Fund we provide a strong stimulus for renovation process of multi-family houses, as exploiting financial engineering instruments and attracting funds of international institutions, a much larger number of residents, as ever to date, will be able to participate in the modernisation programme”, - said Minister of Finance A. Šemeta, who indicated that the agreement signed today expresses an innovative attitude towards the use of the EU structural assistance.

“Funds which will be invested into renovation projects of multi-family houses and will revert to the JESSICA Holding Fund and may be reinvested. Thus, the renovation process is established under the EU Structural Funds assistance, which allows to increase at the maximum the long-term effect of EU funds”, - stresses the Minister of Finance.

JESSICA Initiative is intended to be used in Lithuania for financing renovation investment projects of multi-family houses.  As of the beginning of the year 2008, the Ministry of Finance together with the EIB analysed the possibilities of implementing JESSICA Initiative in Lithuania. After the feasibility study in Lithuania, it was established that at this stage of JESSICA Initiative implementation the investment into energy efficiency enhancement measures would be the most effective one. Following the study “Use of JESSICA Instrument for Energy Efficiency Enhancement in Lithuania” and the proposal by the interinstitutional working group set up by the Prime Minister, the Government of the Republic of Lithuania decided to implement JESSICA Initiative by establishing the Holding Fund. The EIB was appointed by the signed agreement as the manager of the Fund.

The signed agreement defines the establishment of the Holding Fund, selection of its manager and administration principles. Immediately after the signature of the agreement the EIB will start analysing the situation in Lithuania and, as the manager of the Holding Fund, selecting financial intermediaries in Lithuania responsible for the establishment and management of individual financial instruments. It presumed that the amount of LTL 785 million invested in financial instruments will additionally attract identical amount of private funds. The Initiative should strongly contribute also to the implementation of the Economic Promotion Plan approved by the Government of the Republic of Lithuania. One part of which is designated to energy efficiency enhancement of buildings.

 

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