Altum and EIB join forces for energy efficiency investments in Latvia

The European Investment Bank (EIB) has signed a €18 million loan agreement with the Latvian National Promotional Institution Altum to finance energy efficiency projects by Latvian companies, EIB Vice-President Thomas Östros and Altum’s Management Board Chairman Reinis Bērziņš said.
The financing is complemented by a €3 million guarantee under the “Private Finance for Energy Efficiency (PF4EE)” instrument, provided by the European Union under the LIFE programme.
With Latvia already one of the leading countries in the use of renewable energy, this operation with Altum will allow Latvian companies to also use this energy even more efficiently, the European Commission said adding that the programme will support energy efficiency and small-scale renewable energy investments in SMEs, Mid-Caps, and in some cases large enterprises, specifically in the industry sector.
Measures that are eligible for financing include the renovation of buildings to make them more energy efficient, as well as redesigning industrial processes. Specifically this could include interventions on centralised heating systems, insulation of buildings, replacement of windows and doors, but also small-scale renewable energy projects and energy management systems.
European Commission Executive Vice-President Valdis Dombrovskis noted that for Europe to transition to a climate-neutral economy, there is a huge need to invest in energy-efficiency projects. “With the financial support the EU is providing to Altum, Latvian companies of all sizes can take advantage of the opportunity to replace their existing infrastructure with greener alternatives to reduce energy consumption. Every initiative of this kind brings us a step closer to meeting our target of a climate-neutral Europe by 2050,” he said.
Östros stressed that there is much to be gained from energy efficiency in order to pursue climate action. “Investing in climate relevant project is not only about energy generation, or e-mobility, a huge effort is needed to better manage and use the energy that we consume. In-line with our commitment to raise the stake of our climate financing to 50% by 2025, we wholeheartedly support this project with our long-time partner Altum, which will give Latvian companies the chance to improve their environmental standing, and save on energy bills,” he said.
For his part, Bērziņš highlighted Latvia’s huge potential for implementation of sustainable green-minded projects. “A survey, conducted by ALTUM, shows that approximately half of Latvian businesses have considered implementing energy-saving activities, but only a few of them have actually taken any practical steps to do so. Currently, the proceeds from ALTUM green bonds are successfully used to finance viable business projects supporting energy efficiency and renewable energy use,” he said. “In addition to green bond financing, this funding will enable loans to be offered to entrepreneurs and ESCOs with a significantly longer repayment period of up to 15 years. This loan is complemented by an EIB guarantee agreement for loans issued by ALTUM, which lowers interest rates on ALTUM financing for sustainability, energy efficiency and climate change mitigation projects, as well as reducing customers’ security for loans,” Bērziņš added.
The EIB’s relationship with Altum dates back to 2009, when a €100 million loan was signed with Latvijas Hipoteku un Zemes Banka, Altum’s predecessor.