Siauliu Bankas : A new financial instrument for refurbishment of municipal public buildings

On 18 May, Public Investment Development Agency (hereinafter - VIPA) and Šiaulių Bankas signed an agreement on a new financial instrument for renovation of municipal public buildings. Under this agreement, municipalities will receive preferential loans.

'We are glad to contribute to the development of a more modern, more efficient and convenient environment. Facilitating borrowing for renovation of public buildings, we hope to accelerate the refurbishment of such buildings ' - says Mindaugas Rudys, Head of Service Development Division of Šiaulių Bankas.

Foundation of Municipal Buildings is the fund established by VIPA, Ministries of Finance and Environment to promote investments in modernization of municipal public buildings. The European Regional Development Fund has allocated 17 million EUR to the foundation, whereas, 20 million EUR have been contributed by Siauliu Bankas as a financial intermediary.

At favourable terms municipalities will receive preferential loans for a period of up to 20 years. Preferential loans up to 100% of the project value shall be granted to municipalities or their designated entities, whereas, entities providing energy saving services could apply for up to 80% of project value. Major financing criteria requires that is at least 51% of the whole building area is owned by the municipality and, after implementing the energy efficiency improvement project, the building supposed to be used according to the purpose for at least 10 years.

After renovation public buildings in municipalities will become more energy efficient and more comfortable for employees. The aim is to modernize the buildings so that they meet the energy efficiency class C.

It is anticipated that preferential loans granted for the renovation of municipal buildings will attract interest from both municipalities that can borrow themselves and from companies that would like to implement projects under the Energy Saving Services (ETPT) model.

'The ETPT model should become popular and useful for both the private and public sectors. The latter will benefit from the renovation of the buildings leading to betters energy performance indicators. And the private sector is given the opportunity to implement projects under favourable conditions,' said Gvidas Dargužas, Director General of VIPA.

It is expected that applications for loans under the new instrument will be available at Šiaulių Bankas since this June.