The newly established EUR 275 million SB Modernizavimo Fondas will help renovate 600 apartment buildings

To give a new impetus to the renovation of apartment buildings, the SB Modernizavimo Fondas established by Šiaulių Bankas has started operations. Loans to the EUR 275 million Fund were provided by Lithuanian and foreign financial institutions.

Šiaulių Bankas and its subsidiary SB Modernizavimo Fondas, has signed agreements with the European Investment Bank (EIB), the Council of Europe Development Bank (CEB), INVL Asset Management, Swedbank and Nordic Investment Bank (NIB). The 275-million-euro fund will consist not only of investors, but also of the Lithuanian state and the European Structural and Investment Fund (ESIF).

The fund plans to renovate 600 old apartment buildings improving the living conditions of 16,000 households. The project is expected to save 200 gigawatt hours (GWh) of heat and about 50,000 tons of carbon dioxide annually.

Renovation of old apartment buildings can significantly reduce the consumption of energy resources and strengthen Lithuania's energy independence, especially by reducing the import of energy resources from Russia.

"Investors focused on the newly established fund are ready to accelerate the renovation apartment buildings. We have set ourselves the ambitious goal of funding the renovation of more than half a thousand apartment buildings, which would allow residents to reduce the burden of rising heat costs and improve their quality of life.  Rapid renovation of apartment buildings would reduce Lithuania's dependence on fossil fuels, and would also make a significant contribution to the fight against climate change by reducing carbon dioxide emissions“, - said Vytautas Sinius, Chief executive officer of Šiaulių Bankas.

According to V. Sinius, the new fund is a unique financial instrument designed to attract private funding for renovation not only in Lithuania but also in Europe. The structure of this fund allows to obtain significant synergies - by attracting private capital to increase the state funds allocated for funding renovation projects up to 5 times.

"Lithuania's long-term renovation strategy envisages the renovation of the majority of old apartment buildings by 2050, of which as many as 66% are in energy classes D and lower. The strategy aims to reduce primary energy consumption by 60% and completely eliminate the carbon footprint. Modernisation of old apartment buildings can significantly reduce the consumption of energy resources and strengthen Lithuania's energy independence, especially by reducing the import of energy resources from Russia“, - said Simonas Gentvilas, Lithuanian Minister of Environment.

Gytis Žakevičius, advisor to the Minister of Finance, said: "The investment platform is an excellent example of how green investments are able to attract the resources and expertise of international financial institutions such as the EIB to create innovative instruments and unlock the investment potential for investors in Lithuania to finance strategic areas of the economy. The Ministry of Finance expects this financial instrument to attract even more private capital, thus reducing the need for EU structural funds. This initiative will contribute to the use of sustainable public finances, cut heating bills for residents, and reduce the energy dependency on fossil fuel sources and the adverse effects of climate change.”

"Our loan supports Lithuania’s efforts to mitigate climate change and reduce energy consumption for households across the country,” says Kim Skov Jensen, NIB Vice-President & CFO. "The fund provides new financial instruments for renovation projects and acts as a showcase that may lead to similar initiatives in the region”.

SB Modernizavimo Fondas will provide funding for renovation projects that would achieve at least 40% thermal energy savings and ensure the energy class C of the buildings. Residents can apply for renovation credit to any Šiaulių Bankas branch, and all information is available online.

"Supporting environmentally sustainable projects is one of our strategic priorities,” says CEB Governor Carlo Monticelli. "We are pleased to support Šiaulių Bankas and the Lithuanian authorities in their aim to improve living conditions for a large number of citizens and to promote responsible energy consumption”.

“It is the first investment in housing renovation by Lithuanian pension funds. We are pleased that this investment by INVL pension funds which meets the criteria of sustainability will not only help reduce reliance on the use of imported natural gas but will also create new jobs and improve the quality of life for the owners of the renovated apartment buildings,” - said Vaidotas Rūkas, the head of INVL’s investment management division.

Lithuania's long-term renovation strategy envisages the renovation of the majority of old apartment buildings by 2050, of which as many as 66% are in energy classes D and lower. The strategy aims to reduce primary energy consumption by 60% and completely eliminate the carbon footprint.

Šiaulių Bankas, in cooperation with the EIB, has been participating in the modernization programs of apartment buildings for more than ten years and occupies more than 60% of this market. During this period, modernization loans were signed for more than 720 million euros (of which more than 520 million euros are own funds of Šiaulių Bankas), and the bank has provided funding to 2,380 apartment buildings.