The European Investment Bank (EIB) will give a loan of €190 million to the Vilnius cogeneration plant operated by the state-run Vilniaus Energija holding, with guarantees provided by the European Fund for Strategic Investments (EFSI).
The loan for construction of the cogeneration plant in the Lithuanian capital will supply nearly 50% of the total project value, estimated at €381 million.
"The loan will be used for construction of the power plant and acquisition of equipment. The EIB with an EC guarantee is the most reliable financial partner we could have – EFSI funding lays strong groundwork for timely implementation of the project," said Nerijus Rasburskis, director of the Cogeneration Projects Division at Lietuvos Energija.
He said an international tender for a general contractor is being finalized, with construction of the new power plant expected to start in the second half of 2016.
The Lithuanian government have said the project is strategically significant for the country.