Through a combination of loans, technical assistance and grants, the EU-funded Renovation Loan Programme provided associations of apartment owners in Estonia with guidance on and financial assistance for improving the energy efficiency of their homes.
- 11 February 2019
The number of reconstructed houses was one of the project’s achievements but generally the trust towards reconstruction increased remarkably. 30 % of the grants used with the renovation loan were for holistic renovation, and now the percentage using the maximum amount of the grants is near 90 %. There has been a massive change of thinking in Estonia. It is all about the question ‘where does your home start: from the front door or from the apartment door’? It clearly seems that for more and more people it’s starting to be the front door.
To encourage apartment block owners to make their buildings more energy efficient, the Renovation Loan Programme used a combination of grants, technical assistance and financial loans. The loans could be used to pay for up to 85 % of the cost of the renovation and could also be combined with other schemes offering free advice on preparing a project, as well as with rebate-type grants based on the energy efficiency achieved.
As a direct result of this initiative, 615 apartment blocks housing over 23 000 apartments across Estonia became more energy efficient over the project’s lifetime.
Most apartment buildings in Estonia are old and thus require a lot of energy for heating. In fact, experts estimate that 40 % of a building’s total energy consumption goes on heating. As 75 % of Estonians live in apartment blocks, many of which are over 50 years old, this project provided an excellent opportunity to improve the country’s carbon footprint.
However, most apartment owners had few options for modernising their homes, which is where the project’s financial instrument came in. The Renovation Loan Programme provides advantageous loans that can be combined with grants funded from the Green Investment Scheme. The Loan Programme was developed and managed by KredEx, a public financing institution. Funds were distributed to apartment associations via two banks, and the associations could rely on KredEx for technical assistance and help with energy audit grants or guarantees covering their 15 % share of renovation costs.
Among more than 600 apartment blocks renovated during the project was Sõpruse 202, a 162-unit building in Tallinn that was built in the 1970s. Thanks to the financial instrument, all of the apartments in the building were renovated during just one year, netting energy-efficiency improvements of 63 %.
But the benefits of success stories such as this go beyond just energy savings. They also create a snowball effect. Once a building like Sõpruse 202 began reaping the benefits of the renovations, neighbouring buildings wanted to be in on the action too. As a result, current demand for the Loan Programme is stronger than ever.
Total investment and EU funding
Total investment for the project “Renovation loan programme” is EUR 72 000 000, with the EU’s European Regional Development Fund contributing EUR 17 700 000 through the “Regional Research and Innovation” Operational Programme for the 2007-2013 programming period.