eeef in JV with VIPA finances street lighting modernisation project in Kaunas District Municipality

In December 2018, Kaunas District Municipality was the fourth authority to join eeef’s Technical Assistance Facility (TAF) program. In the context of the eeef’s TAF, the Fund supported Kaunas District Municipality in the preparation and implementation of street lighting upgrade, covering feasibility studies, energy audits, evaluation of economic and financial viability of investments and structuring the tender documents through public-private partnership and ESCO model.

The feasibility studies were completed in time with the call for tender being published in 2020. A consortium of UAB Frineta and its subsidiary UAB Venteos was announced as the final ESCO winners in December 2021.

As the result in summer 2022, Kaunas District Municipality signed a public-private partnership agreement for the modernisation and operation of the street lighting system with the chosen consortium. The aim of the partnership agreement is to ensure high-quality street lighting upgrades in the municipality by improving the energy efficiency of the lighting system. In addition, the project will improve the technical condition of the lighting system by introducing modern and efficient lighting and control measures.

Total investment for the district street modernisation amounts to EUR 3.7 million, of which eeef’s JV with VIPA (TIPS: Promoting Sustainable Resource Development) will provide a loan with the amount of EUR 2.9 million. eeef is pleased to be part of the financing and creating a positive energy footprint in Kaunas District Municipality.

“This is the first street lighting modernisation project financed by TIPS and one of the few of that kind in Lithuania, which will not only create better and more qualitative living conditions for residents of Kaunas district but will also allow Kaunas District Municipality to achieve significant energy savings”, says Asta Gladkauskienė, Head of VIPA Customer Service Department.

As part of the Kaunas district street lighting system modernisation project, it is planned to install around 9,000 LED luminaries with automatic dimming modules, illuminate about 50 street crossings, install new and upgrade the existing management, control and monitoring equipment. These measures are expected to reduce energy consumption by more than 70%.

“Street lighting is of great importance for the safety of residents. Statistics confirm that most accidents and thefts occur during the dark hours of the day. Proper lighting significantly increases the safety of residents, reduces the likelihood of accidents, and crimes and makes the area more attractive. Another extremely important factor these days is the reduction of electricity costs”, emphasized Kaunas District Mayor Valerijus Makūnas.

According to Mantas Rikteris, Deputy Director of Kaunas District Municipal Administration, the modernisation of the district street lighting network will reduce energy consumption and the municipality’s electricity costs, and the municipality will be able to direct the saved funds for the development of the street lighting network and for other works to improve the quality of life in the Kaunas district community.

The concession agreement between Kaunas District Municipality and UAB Venteos has been concluded for 15 years. In addition to investment works, UAB Venteos will also perform maintenance operations and manage energy consumption and monitor the lighting levels.

“eeef supported Kaunas District Municipality to conduct the feasibility studies and prepare the investment project in frame of its Technical Assistance facility. We are happy to be part of this investment that was negotiated and financed in collaborative approach with the VIPA professionals,” says Lada Strelnikova, Lead Investment Manager of the eeef.

The main objective of TIPS is to promote investments that can help reduce the demand for energy resources and increase energy efficiency, thereby reducing greenhouse gas emissions. This can range from upgrading of technological processes and equipment for energy savings to investments in the modernisation of buildings, retrofitting of lighting, advanced heating, cooling and air conditioning systems, solar power plants, etc. The platform finances up to 80% of the project investment value for a period of up to 10 years.

VIPA is a national promotional institution established by the Government of the Republic of Lithuania, which operates in the fields of development of urbanized or urbanizing areas, housing and renovation and development of public or public interest infrastructure, and promotion of energy efficiency.

The European Energy Efficiency Fund S.A., SICAV-SIF is a “societé d’investissement à capital veriable” governed by Luxembourg law and was initiated by the European Commission. The Fund is an innovative private-public partnership dedicated to mitigating climate change through energy efficiency measures and the use of renewable energy in the Member States of the European Union.