Kaunas Secures €35 Million EIB Loan to Upgrade Heating System and Boost Renewable Energy

Kaunas Secures €35 Million EIB Loan to Upgrade Heating System and Boost Renewable Energy

(IN BRIEF) Kaunas, Lithuania’s second-largest city, will modernize its district heating system using a €35 million loan from the European Investment Bank (EIB), supported by the European Commission’s InvestEU program. The project, led by utility company Kauno Energija, will upgrade infrastructure, integrate renewable energy sources like biomass and solar power, and reduce reliance on imported natural gas. The improvements will benefit 400,000 residents and local businesses, aligning with the EU’s carbon-neutral goals and Lithuania’s national energy targets.

(PRESS RELEASE) LUXEMBOURG, 17-Sep-2024— /EuropaWire/ — In a bold step towards a sustainable energy future, Kaunas, Lithuania’s second-largest city, will enhance its district heating system with a €35 million loan from the European Investment Bank (EIB). Supported by the European Commission’s InvestEU program, this investment will modernize the city’s infrastructure and boost the use of renewable energy sources such as biomass and solar power.

Kauno Energija, the utility responsible for the district heating network, will lead the project, which involves upgrading pipelines, installing heat storage tanks, and integrating renewable energy. This initiative aims to improve energy efficiency and reduce reliance on imported natural gas, aligning with the European Union’s carbon-neutrality objectives.

Around 400,000 residents in Kaunas and surrounding areas are expected to benefit from the improvements, alongside local small and medium-sized enterprises. The project showcases the EU’s commitment to fostering energy independence through innovative and sustainable solutions.

This modernization effort also supports Lithuania’s National Energy and Climate targets and contributes to the EU’s REPowerEU plan, which focuses on reducing dependence on fossil fuels.

EIB Vice-President Thomas Östros stressed the significance of the project, noting, “This is a vital step forward for both Kaunas and Europe’s energy transition. The upgraded infrastructure will provide a more efficient, reliable, and sustainable energy system.”

Tomas Garasimavičius, General Director of Kauno Energija, emphasized that these investments mark a key advancement in achieving the company’s strategic climate goals and ensuring reliable heat production for the city.

Background Information

About the EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400,000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil-fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the EU is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery and growth. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

About Kauno Energija

Established in 1963, AB Kauno Energija is the second-largest district heat (DH) production and supply company in Lithuania, based on the number of customers, amount of heat supplied, and turnover. The company serves as the DH system operator for over 124,000 users in Kaunas city, Kaunas district, and Jurbarkas.

AB Kauno Energija holds approximately 20% of the Lithuanian DH supply market. The company has a total power generation capacity of 590 MW and heat supply pipelines spanning more than 450 km. With around 350 employees, the company is committed to providing efficient and sustainable energy solutions.

Aligned with Lithuania’s National Energy Strategy, AB Kauno Energija aims to achieve CO2-free heat generation by 2050. The company is actively implementing low-emission innovative technologies and adopting preventive measures to reduce its environmental impact.

The company’s shareholders include Kaunas city municipality (92.84%), Kaunas district municipality (3.75%), Jurbarkas district municipality (1.74%), and other small shareholders (1.67%).

Media Contact:

Kristiina Randmaa
k.randmaa@eib.org
+352 4379 – 72894

Press Office

press@eib.org
+352 43791

SOURCE: European Investment Bank