Best Policy Practices

Best Policy Practices
Housing Policies and Pilot Project
Lithuania
How to deal with energy inefficient buildings
– a thorough account of new housing policies
and financing mechanisms in a former Soviet
Republic, now a European Union member state.
Since 1990 Lithuania has been privatizing apartments in
multifamily buildings. Currently, 97% of the housing stock is
privately owned and only 3% of apartments belong to local
municipalities and are used as social housing stock. Most
of the multifamily buildings were constructed in Soviet times
and are energy inefficient. In 1996 a pilot project on energy
efficiency in housing was started in Lithuania at the initiative of
the World Bank and the Lithuanian government.
The Energy Efficiency Housing project was officially
launched in September 1996, and the first loan agreement
with a homeowners association was signed on 8 July 1997.
The pilot phase of the project ended on 30 June 2001, and
since then the project has been financed from the repaid
funds which formed the revolving fund. The Central Project
Management Agency has administered the project and the
Housing Agency has taken care of the technical administration.
The project objectives were to support private and public
initiatives to reduce energy use in residential and public buildings
and to support the housing privatization process through
increased private initiative in housing maintenance.
The project was also aimed at creating an investmentconducive
environment including a well-tailored legal framework,
affordable financing, comprehensive institutional support
for homeowners, improved services of energy consultants and
enhanced public awareness of energy efficiency and housing
renovation issues.
Before the project was implemented the legal framework
was amended to allow homeowners associations the right to
obtain bank loans without mortgaging individual apartments,
thus reducing transaction costs and lessening household
reluctance to take on loans. The project financing consisted of
a long-term loan, a state grant and a special support scheme
for low-income families to improve affordability. The Housing
Agency through its regional centres provided comprehensive