Li Annex Energy PDF

JESSICA
JOINT EUROPEAN SUPPORT FOR SUSTAINABLE

INVESTMENT IN CITY AREAS
JESSICA INSTRUMENT FOR ENERGY EFFICIENCY IN

LITHUANIA
Supplementary study
FINAL REPORT
3 February 2010
This document has been produced with the financial assistance of the European Union. The
views expressed herein can in no way be taken to reflect the official opinion of the European
Union.
TABLE OF CONTENT
EXECUTIVE SUMMARY......................................................................................................................... 7
1. INTRODUCTION................................................................................................................................. 13
1.1. Context of Study............................................................................................................................. 13
1.2. Overview of the JESSICA operation set up in Lithuania for energy efficiency in multi-apartment
buildings ................................................................................................................................................ 14
1.2.1. Current set up of the JESSICA instrument.............................................................................. 14
1.2.2. Eligible amounts for student dormitories from Lithuanian national envelope of the European
Regional Development Fund............................................................................................................. 14
1.3. Existing relevant EU and Lithuanian legislation and programmes as regards efficient use of
energy and renovation of buildings in the context of student dormitories ............................................ 15
2. ELIGIBILITY ....................................................................................................................................... 18
2.1. Eligibility of student dormitories and other buildings under the jurisdiction of Ministry Education
and Science for application of JESSICA instruments ........................................................................... 18
2.1.1. Eligibility of student dormitories: student dormitories as housing.......................................... 18
2.1.2. Eligibility of other buildings under the jurisdiction of Ministry Education and Science........ 18
2.1.2.1. Provisions of Regulation No 1080/2006........................................................................... 19
2.1.2.2. Cohesion Promotion Operational Programme for the years 2007–2013 ........................ 19
2.1.3. Eligible modernisation measures............................................................................................. 20
2.1.4. Required amendments of legal acts......................................................................................... 22
3. FUND STRUCTURE............................................................................................................................ 23
3.1. Stakeholder analysis ....................................................................................................................... 23
3.1.1. Ministry of Education and Science.......................................................................................... 23
3.1.2. Ministry of Finance ................................................................................................................. 24
3.1.3. Ministry of Environment ......................................................................................................... 24
3.1.4. Higher education institutions (universities and colleges)........................................................ 25
3.1.5. Authorized agencies ................................................................................................................ 26
3.1.6. Energy service companies (ESCO) ......................................................................................... 28
3.1.7. Potential concessionaires......................................................................................................... 29
3.1.8. Municipalities (as founders of secondary schools).................................................................. 30
3.1.9. Banks ....................................................................................................................................... 30
3.2. Institutional scheme: the question of the Urban Development Fund ............................................. 31
3.3. Analysis of the current situation: basic data about students, student dormitories and other
buildings under the jurisdiction of Ministry Education and Science for consideration of eligibility for
JESSICA instruments ............................................................................................................................ 32
3.3.1. Number of students (higher education institutions, vocational training, secondary schools) . 32
3.3.2. Basic data about student dormitories: number of dormitories, occupancy ratio, construction
dates and compliance to the hygiene norms ...................................................................................... 33
3.3.2.1. State higher education institutions ................................................................................... 33
3.3.2.2. State vocational education and training institutions........................................................ 36
3.3.2.3. State secondary and special schools ................................................................................ 39
3.3.3. SWOT analysis for student dormitories .................................................................................. 39
3.3.4. The cost of residence in student dormitories against the rent market...................................... 40
3.3.5. Investments into renovation of student dormitories ................................................................ 41
3.3.6. Other buildings under the jurisdiction of the Ministry of Education and Science .................. 43
3.4. Assessment of the amount of funds needed and their suggested distribution among various tasks
(dormitories, other public buildings, etc.), including calculations of potential energy and financial
savings................................................................................................................................................... 43
3.5. Allocation of risk and return between private and public capital, and between stakeholders........ 50
4. TARGET BENEFICIARIES & FINANCING SCHEMES .................................................................. 52
4.1. The effect of lending by the Urban Development Fund on the public sector debt and deficit....... 52
4.2. Loan by the dormitory manager scheme ........................................................................................ 54
4.3. Loan by the designated state owned limited liability legal entity .................................................. 56
4.4. ESCO (Energy Service Company) scheme .................................................................................... 57
4.5. Concession scheme......................................................................................................................... 57
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4.6. Factoring scheme............................................................................................................................ 58
MAIN CONCLUSIONS AND RECOMMENDATIONS ........................................................................ 61
ANNEXES ................................................................................................................................................ 63
Annex 1. Current set up of the JESSICA instrument for energy efficiency in housing in Lithuania.... 63
Annex 2. Questionnaire for collection of data about student dormitories (used in this study) ............. 64
Annex 3. List of stakeholders interviewed and sources consulted for the purposes of this study......... 66
Annex 4. Investment for renovation of student dormitories managed higher and vocational education
institutions in 2000–2009 ...................................................................................................................... 68
Annex 5. Detailed calculations for possible concession scheme for three (typical) student dormitories
of the Vilnius University ....................................................................................................................... 71
Annex 6. A short summary of partially implemented ESCO scheme for energy efficiency by the
Vilnius City Municipality...................................................................................................................... 76
Annex 7. Summarised financial calculations for renovation of students dormitories........................... 78
Annex 8. Territorial distribution of students dormitories in Lithuania ................................................. 79
BIBLIOGRAPHY ..................................................................................................................................... 81
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LIST OF ABBREVIATIONS
CF – Cohesion Fund
CFCU – Central Financing and Contracting Unit
CPMA – Central Project Management Agency
CPO – Central Purchasing Organization
EC – European Commission
EIB – European Investment Bank
ERDF – European Regional Development Fund
ESCO – Energy Service Companies
EU – European Union
HUDA – Housing and Urban Development Agency
JHF – JESSICA Holding Fund
LDHA – Lithuanian District Heating Association
UDF – Urban Development Funds
4
LIST OF TABLES
Table 1. Full modernisation of dormitories .................................................................................10

Table 2. Implementation of energy efficiency measures only.....................................................10
Table 3. Number of students in the beginning of the academic year ..........................................32
Table 4. Demand and supply of places in university student dormitories (in the beginning of the
academic year)..............................................................................................................................33
Table 5. Monthly rent exclusive of utilities (flats in old construction multi-apartment houses in
the “sleeping” (remote) districts of the cities) (in LTL)...............................................................40
Table 6. Rent prices per student at the dormitories of the Vilnius University and Vilnius College
(inclusive of utilities) (in LTL) ....................................................................................................41
Table 7. Investments made for renovation of student dormitories operated by a public company
Vilniaus universiteto būstas (in LTL)* ........................................................................................41
Table 8. Summary of total renovation works to be carried out and their breakdown into
categories in the universities – managed dormitories (complex renovation) ...............................44
Table 9. Summary of renovation works to be carried out and their breakdown into categories in
the universities – managed dormitories (only energy efficiency related renovation)...................44
categories in the colleges – managed dormitories (complex renovation) ....................................45
Table 11. Summary of renovation works to be carried out and their breakdown into categories
in the colleges – managed dormitories (only energy efficiency related renovation)....................46
Table 12. Average heating price in dormitories (LTL/ m² per month) .......................................47
Table 13. Heating costs in dormitories........................................................................................47
categories in the vocational and training education institutions – managed dormitories (complex
renovation) ...................................................................................................................................48
in the vocational and training education institutions – managed dormitories (only energy
efficiency related renovation) .......................................................................................................49
Table 16. Total funds needed for complex renovation and energy efficiency measures ............49
Table 17. Full modernisation of dormitories ...............................................................................53
Table 18. Implementation of energy efficiency measures only...................................................54
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LIST OF FIGURES
Figure 1. Further education of general upper secondary school graduates .................................32

Figure 2. Occupancy rates at student dormitories of Lithuanian state higher education
institutions ....................................................................................................................................34
Figure 3. Distribution of dormitories of state higher education institutions according to their
construction date ..........................................................................................................................34
Figure 4. Occupancy rates of student dormitories of Lithuanian state vocational education and
training institutions.......................................................................................................................36
Figure 5. Distribution of student dormitories of state vocational education and training
institutions according their construction date...............................................................................36
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EXECUTIVE SUMMARY
This supplementary feasibility study addresses the “the possibility of extending the current
scope of the energy efficiency actions beyond traditional housing, to include student
dormitories, an important component of urban housing, and other buildings under the
jurisdiction of the Ministry of Education and Science”. It does so by providing legal analysis
about eligibility of those buildings for JESSICA instrument and by making detailed calculations
only for student dormitories (with a possibility to extrapolate the findings for other buildings).
The study draws on the scheme already developed for energy efficiency measures for multi-
apartment housing.
As regards available resources which could still be transferred to JESSICA Holding Fund (JHF)
specifically for renovation of student dormitories without redistribution of already committed
funds for multi-apartment housing, additional 39.5 – 72.5 million LTL could be mobilised
depending on the treatment of already committed finances for awareness raising and promotion
of energy efficiency related renovation. Parts of these finances would be subject to differing
geographical eligibility constraints, which could only be avoided if the cash flows within the
JHF are separated.
The study finds student dormitories considered as premises of residential purpose in national
legislation and therefore deemed as housing. Therefore the needed investments should be treated
as eligible under the Regulation No 1080/2006. As regards other buildings under the jurisdiction
of the Ministry of Education and Science, the specified categories provided by the ministry are
clearly public buildings, for which provisions of Regulation No 1080/2006 do not establish
restrictions on eligibility for modernisation from the funds of the ERDF. While this regulation
does not prohibit the use of the JHF finances to invest into public buildings, such a scheme in
Lithuania would require a redesign of the Operational Programme, approval by the European
Commission and discontinuation of the current practice of issuing grants for public buildings. A
loan based approach is certainly worthwhile looking at in the future, and would have been a
proper thing to do for all energy related (repayable) renovation measures irrespective of the use
of the building. Current existence of two parallel schemes for energy efficiency related
renovation of public buildings in Lithuania (existing grant scheme financed by Cohesion Fund
and supposed JESSICA loan instrument financed from ERDF) makes the operation of the loan
scheme very unlikely, unless the funds of the grant scheme dry out.
As regards possibility to finance renovation measures in student dormitories other than energy
efficiency, the study concludes that only energy efficiency improvements as defined in Article
7.1(a) of Regulation No 1083/2006 may be performed in student dormitories because currently
at least two conditions specified in Article 7.2 of Regulation No 1080/2006 (which would
enable investment into measures other than energy efficiency) may not be met. Measures not
related to energy-efficiency could be financed, if appropriate decision on the use of the
resources of the JESSICA Holding Fund exceeding the minimum national co-financing rate is
adopted, pending clarification from the European Commission.
The stakeholder analysis reveals that, in order to be successful, application of JESSICA

instrument for energy efficiency in student dormitories would depend on the irreversible
entrenchment of the policy line by the Government that all investments generating return should
be channelled through the loan schemes. Energy efficiency measures are important to be
financed, but additional measures in order to improve student welfare conditions in dormitories
and in their territories are extremely significant too, because most of dormitories do not meet
hygiene norms and formally even can not be operated. A possibility to install not only energy
efficiency measures, but also to perform complex renovation would strongly motivate higher
7
education institutions to borrow or to participate in the borrowing schemes. Among other
reasons for this supplementary feasibility study, the Ministry of Finance is interested in solving
the problem of renovation of dormitories through employment of the JESSICA holding fund,
albeit in a way as close as possible to the neutral effect to the public debt and budget deficit. The
study does not find potential participants of an ESCO (Energy Service Company) model to be
very enthusiastic about such a scheme, while concession approach generated a much bigger
interest among the potential participants in the scheme.
This study suggests that the currently existing institutional set up for multi-apartment housing
is maintained also for student dormitories and that a financial institution (i.e. a bank or banks)
serve the function of the Urban Development Fund (UDF) as for renovation of multi-apartment
houses. It did not find compelling reasons to advance the possible alternative, namely, the
assignment of the function of the UDF to an existing institution by virtue of a national legal
act.
On 30 September 2009, there were 28 state institutions providing higher education, of which 15
were universities and 13 colleges. Among themselves, they had 124 student dormitories (of
which 45 belonged to colleges and 79 to universities). A total of 28,068 students lived in all
dormitories on 30 September 2009 at a rather high – 92% – average occupancy rate, compared
to the existing accommodation capacity (30,639 places). Higher education institutions use their
income received from accommodation services as well as other funds to maintain and repair
dormitories. However, these funds are not sufficient for renovation of dormitories. 83% of the
funds received from accommodation services are used to pay for administration and utilities of
dormitories, 16% for maintenance and 1% for other necessities. More then half (69) of the
student dormitories are in operation already for 29–49 years. According to the data of April
2008, there were 75 state vocational education and training institutions in Lithuania. Between
them, there were a total of 86 dormitories, which hosted 9.462 students at an occupancy ratio of
51% (the maximal capacity stood at 18,578 living places). Majority student dormitories of
vocational education and training institutions have been in operation for 33–37 years.
Due to considerable depreciation, almost all dormitories do not meet the following standards set
in three hygiene norms (for accommodation services, ambient air of residential environment and
microclimate in residential and public utility buildings) and three technical regulations of
construction on essential requirements for buildings (hygiene, health and environmental
protection; on heating, ventilation and air conditioning, and energy saving and heat retention).
According to the data of the Register of Authorizations and Hygiene Passports (managed by the
State Public Health Service under the Ministry of Health), the non compliance rate among
various categories of dormitories has been as follows, a) 73% among higher education
institutions (90 out of 124 buildings), b) 61% among state vocational education and training
schools (52 out of 86), and c) 81% among general education schools and schools for students
with special needs (89 out of 111).
Investments actually made in the framework of implementation of the Programme for

Renovation of Student Dormitories of Higher Education Institutions (which correspond to the
investment source (c) above) during 2006–2009 totalled LTL 40 million, of which LTL 25
million were invested into university dormitories and LTL 15 million were spent on college
dormitories. In addition about LTL 10.5 million of reconstruction works were financed by
transfers from Privatization Fund of Lithuania in 2007–2008, most likely to make up the
difference of forecasted and actual renovation costs during the period of construction (prices)
boom in Lithuania. It is important to note, that, according to the Ministry of Finance, the
allocations set aside for reconstruction of dormitories in the State Investment Programme in
2010 concern only completion of reconstruction works from previous years.
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Experience shows that renovated dormitories save about 30% of heating, and heating costs
could be reduced by 50%. Thus, for instance, in 2003–2004 three dormitories of Vilnius
Pedagogical University were renovated. Before renovation, heating costs comprised LTL 3/m²,
while after renovation they stood at approximately LTL 1.5/m², meaning that LTL 1.5/m² is
saved during the heating season. Renovation costs were LTL 148–150 per 1 m². According to
the calculations made, these investments should pay back in 14 years.
Calculations were made in order to measure the magnitude of the renovation problem and
primarily to target student dormitories of three types, namely those of a) universities, b) colleges
and c) vocational education and training institutions. These calculations were made for two
scenarios, namely, a) in order to implement only energy efficiency measures (as defined in the
applicable EU regulations) or b) to undertake complex renovations (beyond energy efficiency to
tackle also the problem of improvement of welfare in the buildings and around them). Also two
investments financing alternatives were evaluated: a) with 15% state support and b) without
state support.
The background data for these calculations were generated by the survey, which the consultants
made with the universities, colleges and vocational education and training institutions about the
state of play of their dormitory stock and improvements needed. According to the data received,
most of the dormitories require modernisation of roofs and balconies, replacement of windows,
insulation of walls, modernisation of heating stations, replacement of electric installation and
pipes, renovation of water closets and kitchens. Dormitory surroundings should be also managed
– car parking lots should be expanded, sport and leisure fields developed, etc.
For dormitories of higher education (university and college) institutions, the scope of remaining
renovation works will be as follows: replacing approx. 14 thousand m² of old windows;
renovating and insulating approx. 65 thousand m² of roofs and approx. 2.5 thousand meters of
outdoor heating circuits; modernising 37 heating stations; replacing over 4 thousand m² of
exterior doors; insulating more than 266 thousand m² of external walls; repairing approx. 2,500
m² of dormitory premises, approx 30.4 thousand m² of toilets and showers and almost 18
thousand m² of kitchens; renovating cold, hot, circulating water and sewage systems in
dormitories of 9 universities; partially renovating electricity and lighting systems in dormitories
of 7 universities; renovating ventilation systems in dormitories of 3 universities.
The total area of dormitories of higher education institutions to be renovated comprises 462.6
thousand m², of which university dormitories make up 315.6 thousand m² and college
dormitories 147 thousand m². Standard energy demand for heating, ventilation and hot water is
approx. 84,000 MWh/year. In order to cover energy costs universities spend over LTL 8 million,
while colleges approx. LTL 3 million per year. According to the data provided, during the last
heating season dormitories consumed 49,267.19 MWh of energy (of universities consumed
31,292.3 MWh and colleges 17,974.89 MWh).
The calculations of possible energy savings are based on the results received by comparing
energy savings in modernised dormitories. According to the monitoring of these dormitories
carried out when drafting a Programme for the Renovation of Student Dormitories of Higher
Education Institutions, the renovation of dormitories saves approx. 30% of heating energy
consumption and up to 50% of heating costs. The investments into 1 m² amounted to LTL 148–
150. The calculations show that the investments into these dormitories should pay back in 14
years. The calculations of financial savings are based on the presumption that the price of
electric energy is 35 ct/kWh, of heating energy – 21 ct/kWh, of hot water LTL – 16.15/m³.
9
After the modernisation and the implementation of energy efficiency measure (insulation of
walls and roofs, replacement of piping and windows), the energy consumption will be reduced
by 30% on average. In this way, 14,780 MWh of energy or LTL 3.1 million will be saved
annually. The reduction in energy consumption in buildings will save another 10,420 MWh of
energy. Hence, after renovation, the standard energy consumption will be 58,800 MWh and the
savings will amount to 25,200 MWh or LTL 5.3 million per year (where heating price is 21
ct/KWh).
One of the key energy saving sources could be the construction of co-generation power plants in
the area of student dormitories. It would reduce the payback period of investments by 1.5 times
at least. Such results are possible as the cost of electric energy produced in a co-generation
power plan is 12.4 ct/kWh, and of heating 10.8 ct/kWh. The calculations are based on the
presumption that one co-generation power plant, the capacity of which is 100 kW of output and
80kW of electric power per hour, is built for a complex of five dormitories with the area of
2,000 m² each. Such co-generation power plant, including installation works, costs
LTL 480,000. However, this option would be possible only if the current district heating supply
does not meet the established parameters (eg energy losses in a long range circuit) and most
likely would be opposed by district heating companies. It therefore would require further
investigation.
The total area of vocational education and training institutions to be renovated is 262 thousand
m². The energy consumption during the last season was 23,012.99 MWh.
Modernisation works could be financed under a scheme similar to the one used for the
programme for the modernisation of multi-apartment buildings financed by the JESSICA funds.
Hence, a soft loan with the fixed annual interest rate of 3% would be granted together with 15%
state support. In such a case, the total amount of the state support required for the
implementation of energy-efficiency measures in all dormitories would aggregate
LTL 22,478,127.73. With a help of the state support and without it, the investments (requiring
loan funds) into 1 m² (where the energy savings are LTL 11.46/1 m²) would be as follows:
Table 1. Full modernisation of dormitories

Payback
Payback
Funds period
Investments State Interest per period with
required for without
Institution into 1 m² (in support to 1 year (in 15% state
1 m² (in state
LTL) m² (in LTL) LTL) support (in
LTL) support (in
years)
years)
Universities 349.17 28.82 320.35 4.83 28.0 30.5
Colleges 312.09 29.04 283.04 4.26 24.7 27.2
Vocational
education and
315.22 34.78 280.44 4.22 24.5 27.5
training
institutions
Table 2. Implementation of energy efficiency measures only
10
Payback
Payback
Funds period
1 m² (in state
LTL) support (in
years)
years)
Universities 192.15 28.82 163.33 2.46 14.3 16.8
Colleges 193.61 29.04 164.57 2.48 14.4 16.9
Vocational
education and
231.87 34.78 197.09 2.97 17.2 20.2
training
institutions
Modernisation of dormitories of education institutions should be financed on the basis of the

reduction in energy consumption so that savings could help to pay back loans irrespective of
the borrower (the education institution, the authorised institution organising modernisation
works or the contractor). The credit period should not be shorter than the payback period of the
measures implemented. Similar to the programme for the modernisation of multi-apartment
buildings, soft loans with the fixed annual interest rate of 3% should be granted.
Another possible source of income for loan servicing is rent paid by students and pupils who
live in dormitories. However, it is risky – the increase in the rent for dormitory accommodation
may result in the reduction of the number of students living in dormitories as the education
institution will not be able to compete with the prices offered by the private sector.
If the rent is left unchanged, some of the funds received could be used for loan servicing since
a modernised dormitory requires fewer resources for the running repair during the first 5 years.
Irrespective of the borrower, the loan payback should be ensured by: (a) rent paid by dormitory
residents; (b) energy savings and smaller demand for funds to pay for energy. Some of the
savings (approx. 75–80%) should be used for loan servicing.
If, according to the calculations, the savings amount to LTL 11.46/m², LTL 8.6–9.2/m²
annually could be directed to loan servicing. The remaining amount required for loan servicing
could comprise of the income received for the services provided to inhabitants.
If funds are borrowed from banks, one of the main issues will be risk sharing and credit
security measures. The risks should be assumed by the state as there are no legal possibilities to
mortgage the buildings to be modernised. Furthermore, a list of priority buildings to be
modernised should be drawn up in order to prioritise buildings which consume the most energy
and the state of which is extremely poor. A loan should be granted only if the investment
project provides for the implementation of energy-efficiency measures along with other
modernisation measures, which ensure at least 20% energy savings per year. Institutionally,
two loan schemes are possible: (a) similar to the case of multi-apartment buildings, loans are
granted by the Holding Fund via banks operating in Lithuania; (b) loans granted by the
institution authorised by the Holding Fund. The study already proposed the preference for
option (a).
In order to avoid drawing of the new selection criteria or requirements, which would be time-
consuming to prepare, it is proposed to leave the same eligibility and selection criteria as in the
case of multi-apartment buildings. Further, given the financing situation of education
11
institutions, it is also proposed not to request the co-financing of at least 5% of the project
value, if education institutions take loans themselves. In this case, 100% of the project value
should be financed. In all other cases, 95% of the project value would be financed. A loan with
the fixed annual interest rate of 3% would be granted for a period of up to 20 years. 15% state
support could be provided to the implemented projects under the same conditions as it is
provided to multi-apartment buildings.
As regards the effect of lending operation to public debt and deficit, the establishment of the
JESSICA holding fund has increased the debt of the public sector and the fiscal deficit
respectively only by the amount of national co-financing. It was one-off deficit-increasing
action calculated during the transfer of the funds borrowed for co-financing to the JESSICA
holding fund. Further borrowing from the JESSICA fund for the implementation of the goals
set by the fund will increase the debt of the public sector and the deficit respectively,
depending on the borrower (i.e. if the borrower is a public sector entity, the deficit and the debt
will grow). However, there are no methodological explanations yet in this respect (for
JESSICA instruments). Commercial loans (expenditure experienced during their use) to public
sector entities should be added to the debt/deficit of the public sector.
This study analyzes five possible financing schemes, of which the first three (loan by the
dormitory manager, state owned limited liability legal entity or ESCO) would be possible for
application of energy efficiency measures from the JESSICA instrument. The last two schemes
(concession and factoring) could be used for more ambitious (complex) modernization which
in addition to energy efficiency measures would also target welfare measures. Of the five
schemes, loan by the dormitory manager and concession schemes seem to be most promising
to achieve the aims of dormitory renovation. If this renovation aims at issues beyond energy
efficiency measures, then concession scheme should be advanced further.
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1. INTRODUCTION
1.1. Context of Study
In November 2009, the JESSICA Task Force of the European Investment Bank (EIB) drafted
the terms of references for consultancy services to carry out a supplementary study on JESSICA
instruments for energy efficiency in Lithuania. For this purpose the JESSICA task force
commissioned a consultant, Europos socialiniai, teisiniai ir ekonominiai projektai (ESTEP) to
undertake this study. The draft final report from the consultant was expected to be submitted
within eight weeks after the launch of the study. It was expected to include all elements of the
final report.
For the purposes of this study, the consultant mobilized a team of experts. Dr Klaudijus
Maniokas assumed the overall responsibility for coordination of this study. Darius Žeruolis and
Renata Pakalnyt÷ analyzed the institutional issues (stakeholders, fund structure and target
beneficiaries). Gintautas Maniušis and Aist÷ Jucien÷ analyzed financing issues (fund’s strategy
and products). Legal issues in this study were dealt by SPP (Sutkien÷, Pilkauskas ir partneriai)
law firm, which also assisted the team of experts with legal verification of proposed institutional
and financial solutions.
The study was necessitated by the request of the Lithuanian Ministry of Education and Science
and the Ministry of Finance to EIB “to review the possibility of extending the current scope of
the energy efficiency actions beyond traditional housing, to include student dormitories, an
important component of urban housing, and other buildings under the jurisdiction of the
Ministry of Education and Science”.
This definition of the general scope is, however, a rather broad one, especially in the view of
very tight deadlines established for this supplementary study. During the introductory meetings
between the ESTEP experts and the representatives of EIB and Ministries of Finance, Education
and Science, it was agreed to solve this dilemma in the following way. Legal analysis was to be
made for the full scope of the terms of references, namely, to analyze eligibility of student
dormitories and other buildings under the jurisdiction of the Ministry of Education and Science
for possible application of the JESSICA instrument. However, detailed financial calculations
were agreed to be made only for student dormitories, that is, for the scope established by the
Resolution No 843 of the Government of the Republic of Lithuania of 1 September 2006 On the
Approval of the Programme for the Renovation of Student Dormitories of Higher Education
Institutions (which applies to public (state) higher education institutions, i.e. universities and
colleges), and for student dormitories of vocational education and training institutions. Data
available about other buildings under the jurisdiction of the Ministry of Education and Science
were processed only in the aggregate way in order to demonstrate the magnitude of the
renovations needed to improve energy efficiency for those buildings.
This supplementary study builds on the experience accumulated and lessons learned while
preparing a targeted study to explore/justify JESSICA intervention, namely that on renovation
of multi-apartment houses for energy efficiency (Supplementary Study on JESSICA Instruments
for Energy Efficiency, April 2009). Its approach is therefore very similar to that employed in the
previous study. Alternatives are analyzed and presented only as they arise from the differences
between multi-apartment housing and dormitories.
13
1.2. Overview of the JESSICA operation set up in Lithuania for energy efficiency
in multi-apartment buildings
1.2.1. Current set up of the JESSICA instrument
On 11 June 2009, Ministries of Finance and Environment of Lithuania and the European
Investment Bank signed a Funding Agreement establishing the JESSICA Holding Fund
Lithuania, managed by European Investment Bank, for the purpose of investing funds in
housing energy efficiency projects through the banking sector in Lithuania. The EIB, acting as
JESSICA Holding Fund, launched a call for expression of interest to channel the first tranche of
funds to final beneficiaries through financial intermediaries. Applications were accepted until 14
December 2009, and the EIB is now evaluating the proposals. Selected financial intermediaries
(banks or credit unions) will provide preferential credits (soft loans with promotional interest
rates and long maturities) to owners of multi-apartment buildings. The fund will therefore
contribute to reduction of energy consumption and achieve other associated goals, such as
reduction of emissions and improvement of quality of life1.
Ministry of Finance as managing authority participates in the scheme of renovation of housing

for energy efficiency in Lithuania. Ministry of Environment as intermediary authority is
responsible for implementation of measure VP3-1.1-AM-01-V Holding Fund for the
Modernization of Multi-Apartment Houses of Lithuanian Operational Program for Promotion
of Cohesion for 2007–2013.2 In accordance with the Funding Agreement establishing the
JESSICA Holding Fund, Ministries of Finance and Environment shall contribute to the
JESSICA Holding Fund a total amount of EUR 227 million3.
Selected financial intermediaries (banks or credit unions) are acting as Urban Development
Funds (UDFs) leveraging commercial co-financing from their own resources and providing co-
guarantee. Through its regional departments located in ten major cities of Lithuania, Lithuanian
Housing and Development Agency (HUDA) provides technical assistance to owners of housing
on renovation (modernization) of multi-apartment houses. The current set up of the JESSICA
instrument is schematically summarized in the Annex 1.
1.2.2. Eligible amounts for student dormitories from Lithuanian national envelope of the
European Regional Development Fund
This section analyzes eligible amounts of investment which could be transferred to the JESSICA
Holding Fund in Lithuania for energy efficiency measures from Lithuanian national envelope
for 2007–2013 of the European Regional Development Fund (ERDF). It is based on the
information supplied by the Division of Managing Operational Programme for Cohesion
Promotion of the Ministry of Finance.
The ceiling of available fund which could be deployed to JESSICA Holding Fund is defined by
the ceilings of two constituent sources. The first source is either 3% available for housing of the
ERDF funds allocated to an Operational Programme or 2% of the total national envelope to be
financed by the ERDF, as set out in Article 7.2(b) of Regulation No 1080/2006 of the European
Parliament and Council regarding the European Regional Development Fund. Lithuania opted
1
European Investment Bank website: www.eib.org, accessed on 14 January 2010.
2
EU structural support for Lithuania 2007–2013 website: www.esparama.lt, accessed on 12 January 2010.
3
European Investment Bank website: www.eib.org, accessed on 14 January 2010.
14
for the latter criterion and therefore can transfer a total of LTL 237.7 million to HF from this
source. Allocation of these funds is guided by Article 47 of Regulation No 1828/2006 of the
European Parliament and Council, which a) (in 47.1) enumerates criteria for determining
geographic areas of intervention into the areas of integrated urban development planning or
experiencing or threatened by physical deterioration and social exclusion, and b) (in 47.2)
frames the investment itself, i.e. into refurbishment of the following main structural parts of the
building, technical installations of the building, and energy efficiency actions. In Lithuanian
case, the geographical scope according to this Regulation would be limited to the problem areas
(14 municipalities), which were defined by the Government.
The second source is additional 4% of the national envelope from the ERDF, which were made
available for housing by the amendments to Regulation No 1080/2006 on 6 May 2009 (i.e. by
Regulation No 397/2009). The ceiling of this tranche constitutes LTL 475 million.
Therefore, a total of LTL 713 million can be transferred to JESSICA Holding Fund for the
purposes of housing from the ERDF during the 2007–2013 EU Financial Perspectives. The
amounts which can be used for renovation of student dormitories, should be calculated
depending on whether a recent (24 December 2009) allocation of LTL 30 million to Housing
and Urban Development Agency for promotion and awareness raising about energy efficiency
related renovation (measure VP3-1.1-AM-02-V Incentive for the Modernization of Multi-
Apartment Houses) is treated as investment into housing. If it is not, then additional
LTL 39.5 million could be transferred to JHF under the 4% ERDF cap (and unconstrained
geographically), and LTL 33 million could be shifted away from other planned measures and
invested under the 2% ERDF capping rule, which would be constrained by the territorial
provisions of Article 47 of Regulation No 1828/2006. If promotion measures are nevertheless
treated as investment into housing, the additional investment into student dormitories could be
LTL 39.5 million, but the lion’s share (LTL 33 million) would be subject to geographical
constraints of Article 47.1 of Regulation No 1828/2006. This restriction could be avoided only if
the cash flows within the JHF are separated.
1.3. Existing relevant EU and Lithuanian legislation and programmes as regards

efficient use of energy and renovation of buildings in the context of student
dormitories
The main regulations4 laying down the rules of EU Structural Funds, including establishment
and use of financial engineering instruments were comprehensively reviewed in Jessica
Evaluation Study for Lithuania5 and Supplementary Study on JESSICA Instruments for Energy
Efficiency6. The provisions of these regulations are relevant in this study while determining the
definition of housing (dormitories as housing), eligibility of other public buildings under the
jurisdiction of Ministry Education and Science to be financed from JESSICA funds, eligible
modernization measures, etc. This analysis is presented in Section 2 of this study.
4
(a) Council Regulation (EC) No 1083/2006 of 11 July 2006 on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, Official Journal,
2006, L 210 (with later amendments); (b) European Parliament and Council Regulation (EC) No 1080/2006 of 5
July 2006 On the European Regional Development Fund and repealing Regulation (EC) No 1783/1999, Official
Journal, 2006 L, 210 (with later amendments); (c) Council Regulation (EC) No 1828/2006 of 8 December 2006 on
the rules for the implementation of Council Regulation (EC) No 1083/2006 on the European Regional
Development Fund, the European Social Fund and the Cohesion Fund and of European Parliament and Council
Regulation (EC) No 1080/2006 on the European Regional Development Fund, Official Journal, 2006, L 371 (with
later amendments).
5
JESSICA Evaluation Study for Lithuania, January 2009.
6
Supplementary Study on JESSICA instruments for energy efficiency, April 2009.
15
National legislation relevant to this study is, first of all, programmes for the renovation of
student dormitories and education institutions, namely: Resolution of the Government of the
Republic of Lithuania On the Approval of the Programme for the Renovation of Student
Dormitories of Higher Education Institutions7 and Resolution of the Government of the
Republic of Lithuania On the Approval of the Programme for the Renovation of Education
Institutions.8
Technical regulations for construction9 and hygiene norms10 serve as references in this study in
order to check whether they constitute a sufficient basis for performance (including energy
efficiency) of dormitories and other public buildings. Performance standards are important for
auditing performance before and after renovation not only to verify efficiency (savings)
achieved.
The Law on Education11 establishes the goals and principles of the educational system of
Lithuania, the framework of institutions, its functions and powers, funding of education, etc.
The provisions of the Law concerning property of education institutions and the disposal of their
assets, founding, reorganisation, liquidation and restructuring of State-run schools and higher
education institutions are important. The Law on Science and Studies12 sets up regulation of the
State higher education system, and inter alia, provides a framework for management of the
property of state higher education institutions and other related issues. For more details please
refer to Section 3.
The Law on Budget Structure13 defines borrowing conditions and restrictions for state budgetary
institutions. Its provisions are relevant to this study and are evaluated in Section 4 while
analysing possible institutional scheme and target beneficiaries.
The Law on Concessions14 is applicable for concessions and its provisions will be relevant in
7
Resolution of the Government of the Republic of Lithuania No 843 of 1 September 2006 on the Approval of the
Programme for the Renovation of Student Dormitories of Higher Education Institutions (Official Gazette No 94-
3699, 2006).
8
Resolution of the Government of the Republic of Lithuania No 559 of 10 June 2009 on the Approval of the
Programme for the Renovation of Education Institutions (Official Gazette No 72-2916, 2009).
9
(a) Technical regulation for construction STR 1.01.09:2003 on Classification of Buildings According to their
purpose (adopted by Order No 289 of the Minister of Environment of the Republic of Lithuania of 11 June 2003
(Official Gazette No 58-2611, 2003)); (b) Technical regulation of construction STR 2.01.01(3):1999 on Essential
Requirements for Buildings. Hygiene, Health and Environmental Protection (adopted by Order No 549 of the
Minister of Environment of the Republic of Lithuania of 21 October 2002 (Official Gazette No 106-4776, 2002));
(c) Technical regulation of construction STR 2.09.02:1998 on Heating, Ventilation and Air Conditioning (adopted
by Order No 19 of Minister of Environment of the Republic of Lithuania of 18 January 1999 (Official Gazette No
13-333, 1999; No 39-1446, 2002; No 145-5552, 2006)).
10
(a) Hygiene Norm HN 118:2002 on Health Safety Requirements for Accommodation Services (adopted by
Order No V-2 of the Minister of Health Care of the Republic of Lithuania of 6 January 2003 (Official Gazette No
13-531, 2003)); (b) Hygiene Norm HN 35:2007 on Maximum Permitted Concentration of Chemical Substances
(Pollutants) in Ambient Air of Residential Environment (adopted by Order No V-1191 of the Minister of Health
Care of the Republic of Lithuania of 5 December 2008 (Official Gazette No 145-5858, 2008)); (c) Hygiene Norm
HN 42:2004 on Microclimate in residential and public utility buildings (adopted by Order No V-479 of the
Minister of Health Care of the Republic of Lithuania of 29 June 2004 (Official Gazette No 105-3911, 2004)).
11
Law of the Republic of Lithuania on Education No IX-1630 of 17 June 2003 (adopted by the Seimas of the
Republic of Lithuania (Official Gazette No 63-2853, 2003)).
12
Law of the Republic of Lithuania on Science and Studies No XI-242 of 30 April 2009 (adopted by the Seimas
of the Republic of Lithuania (Official Gazette No 54-2140, 2009)).
13
Law of the Republic of Lithuania on Budget Structure No IX-1946 of 23 December 2003 (adopted by the
Seimas of the Republic of Lithuania (Official Gazette No 4-47, 2004)).
14
Law of the Republic of Lithuania on Concessions No IX-1647 (adopted by the Seimas of the Republic of
Lithuania of 24 June 2003 (Official Gazette No 70-3163, 2003)).
16
case concession scheme is chosen for renovation of dormitories. It is analysed in Section 4.
17
2. ELIGIBILITY
2.1. Eligibility of student dormitories and other buildings under the jurisdiction of
Ministry Education and Science for application of JESSICA instruments
This part of the study addresses three questions, namely, whether a) student dormitories and b)
other buildings under the jurisdiction of the Ministry of Education and Science are eligible for
application of JESSICA instruments, and c) whether the investment from JESSICA Holding
Fund would be eligible for other housing related measures than energy efficiency.
2.1.1. Eligibility of student dormitories: student dormitories as housing
As funds of JESSICA Holding Fund (hereinafter, JHF) are specifically allocated from the
European Regional Development Fund (hereinafter, the ERDF), the provisions of Regulation No
1080/2006 on the European Regional Development Fund and repealing Regulation No
1783/199915 (hereinafter, Regulation No 1080/2006) are to be applied.
Article 7.1(a) of Regulation No 1080/2006 allows for the Member States to determine
themselves what may be considered as housing by indicating that “Member States shall define
categories of eligible housing in national rules <…>”.
Lithuanian legal acts define that student dormitories are premises of residential purpose. Article
6.623 of Civil Code of the Republic of Lithuania16 stipulates that dormitories are premises in
residential houses. Additionally, Technical Regulation for Construction STR 1.01.09:2003
“Classification of Buildings according to their Purpose”17 also stipulates that dormitories are one
kind of premises of residential purpose.
Accordingly, as under national legislation student dormitories are considered to be premises of

residential purpose, student dormitories are to be deemed as housing and expenditure thereon
should be treated as eligible under Regulation No 1080/2006.
2.1.2. Eligibility of other buildings under the jurisdiction of Ministry Education and
Science
Ministry of Education and Science of the Republic of Lithuania requested the consultants to
evaluate the possibilities to use JHF for modernisation of the following building categories
under its jurisdiction18:
a. educational and laboratory buildings of state universities and state research institutions;
15
European Parliament and Council Regulation (EC) No 1080/2006 of 5 July 2006 on the European Regional
Development Fund and repealing Regulation (EC) No 1783/1999, Official Journal, 2006, L 210, P. 1-11.
16
Civil Code of the Republic of Lithuania (adopted by Law No VIII-1864 by the Seimas of the Republic of
Lithuania of 18 July 2000 (Official Gazette No 74-2262, 2000)).
17
Technical regulation for construction STR 1.01.09:2003 on Classification of Buildings According to their
purpose (adopted by Order No 289 of the Minister of Environment of the Republic of Lithuania of 11 June 2003
(Official Gazette No 58-2611, 2003)).
18
Clarification of the Ministry of Education and Science of 11 December 2009 provided in response to the letter by
the consultancy team.
18
b. educational buildings and buildings of practical training of state and municipal vocational
training institutions;
c. buildings of general education schools and buildings of preschools.
2.1.2.1. Provisions of Regulation No 1080/2006
Modernisation of such public buildings may be attributed to the relatively broad Convergence
objective of the ERDF.
Article 4 of Regulation No 1080/2006 stipulates that the precise policy shall depend on the
specificities of each Member State, however, Member States shall take into account broadly-
defined priorities, such as research and technological development, innovation and
entrepreneurship, improvement of links between tertiary education institutions, research
institutions and research and technology centres, information society, integrated pollution
prevention and control, investments in culture, including protection, promotion and
preservation of cultural heritage, education investments etc.
Article 7 of Regulation No 1080/2006 defines the eligibility of expenditure and indicates the
possible expenditure particularly on housing. This provision should not be treated as a general
rule providing for that only expenditure on housing is allowed, but as a specific exception for
expenditure on housing, i.e. only costs for housing are bound by certain limitations.
Accordingly, provisions of Regulation No 1080/2006 directly themselves do not establish

restrictions for modernisation of public buildings from the funds of the ERDF.
2.1.2.2. Cohesion Promotion Operational Programme for the years 2007–2013
The Cohesion Promotion Operational Programme for the years 2007 – 2013 (hereinafter, the
Operational Programme) prepared by the Republic of Lithuania and approved by the decision of
the European Commission19 does not provide for the possibility to modernise public buildings
particularity form the funds of the ERDF and, therefore, from the funds of JHF.
Under Article 2.1 of Regulation No 1083/2006 laying down general provisions on the
European Regional Development Fund, the European Social Fund and the Cohesion Fund and
repealing Regulation No 1260/199920 (hereinafter, Regulation No 1083/2006) the Operational
Programme is a document setting out a development strategy with a coherent set of priorities to
be carried out with the support of a particular fund. Accordingly, the Republic of Lithuania is
bound to use the funds from the ERDF particularly for the purposes that have been indicated in
the Operational Programme.
Four priorities are set forth in the Operational Programme, each of which is financed by
particular fund:
a. Priority 1 “Local and urban development, conservation of cultural heritage and nature and
adaptation for tourism development” (financed by the ERDF);
19
Decision of the European Commission No C(2007) 3738, CCI 2007LT161PO0001 of 30 July 2007 (with later
amendments).
20
Council Regulation (EC) No 1083/2006 of 11 July 2006 on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, Official Journal,
2006, L 210, P. 25.
19
b. Priority 2 “Quality and availability of public services: health, education and social
infrastructure” (financed by the ERDF);
c. Priority 3 “Environment and Sustainable Development” (financed by the Cohesion Fund,
(hereinafter, the CF));
d. Priority 4 “Technical support for Cohesion Promotion Operational Programme” (financed
by the CF).
As the funds of JHF are allocated from the ERDF, only Priority 1 and Priority 2 should be
taken into account. However, detailed tasks of these both priorities do not include
modernisation of public buildings21.
The Operational Programme also indicates that financial engineering instruments such as
JESSICA are to be used only while implementing tasks outlined in Priority 1 (71, 78 pages of
the Operational Programme). The Government of the Republic of Lithuania has transferred the
funds to JHF particularly for the development of housing according to Priority 1 of the
Operational Programme 22.
Meanwhile, as for modernisation of public buildings (including buildings of educational

purposes), it is foreseen in Priority 3 “Environment and Sustainable Development”, which is
financed not from the ERDF, but from the CF, funds of which are not allocated in JHF.
Accordingly, in the current wording of the Operational Programme modernisation of public
buildings from the funds of the ERDF, and, therefore, from the funds of the JHF is not foreseen.
2.1.3. Eligible modernisation measures
Regulation No 1080/2006 establishes certain restrictions on eligible expenditure on the housing.

It is stated that only expenditure on energy efficiency improvements and on the use of
renewable energy in existing housing shall be deemed eligible, i.e. Article 7.1(a) of Regulation
No 1080/2006 indicates that “in each Member State, expenditure on energy efficiency
improvements and on the use of renewable energy in existing housing shall be eligible <…>”.
According to this provision, modernisation of student dormitories is possible by particularly
implementing measures that improve energy efficiency.
Article 7.2 of Regulation No 1080/2006 specifies that for the new Member States expenditure
on the other measures (not necessarily on those that increase energy efficiency) is possible only
if the following conditions are met:
1. Expenditure shall be programmed within the framework of an integrated urban development

21
Tasks of Priority 1 “Local and urban development, conservation of cultural heritage and nature and adaptation for
tourism development”: (i) reduce differences of living environment and quality between major cities and other
cities, particularly focusing on improving housing conditions; (ii) create preconditions for faster diversification of
economic activities in rural areas; (iii) promote foreign and local tourism by properly using of natural resources and
cultural heritage, and create favourable conditions for active recreation; (iv) enhance preservation of natural
resources (especially water resources, landscape and biodiversity), by allowing their efficient adaptation for the use
of people and economic (65 page of the Operational Programme). Tasks of Priority 2 “Quality and availability of
public services: health, education and social infrastructure”: (i) provide accessible health services of good quality;
(ii) provide higher quality of educational services and their accessibility by enhancing participation of people of all
age groups in lifelong learning; (iii) ensure better consistency of supply and demand of professional training,
improve the quality of workforce and encourage the economically inactive population to enter the labour market;
(iv) encourage better integration into the society and labour market for people with social risk and of socially
excluded individuals and their families (80 page of the Operational Programme).
22
Extract from the Minutes No 17 of the Meeting of the Government of the Republic of Lithuania of 4 March 2009,
Clause 5.3.
20
operation or priority axis for areas experiencing or threatened by physical deterioration
and social exclusion.
The European Commission has adopted the list of criteria needed for determining these
specific areas. Article 47.1 of Regulation No 1828/2006 of setting out rules for the
implementation of Council Regulation No 1083/2006 laying down general provisions on the
European Regional Development Fund, the European Social Fund and the Cohesion Fund
and of Regulation No 1080/2006 of the European Parliament and of the Council on the
European Regional Development Fund23 indicates that in determining these areas that
experience or are threatened by physical deterioration and social exclusion Member States
shall take into consideration at least one of the following criteria:
(a) a high level of poverty and exclusion;

(b) a high level of long-term unemployment;
(c) precarious demographic trends;
(d) a low level of education, significant skills deficiencies and high dropout rates from
school;
(e) a high level of criminality and delinquency;
(f) a particularly rundown environment;
(g) a low level of economic activity;
(h) a high number of immigrants, ethnic and minority groups, or refugees;
(i) a comparatively low level of housing value;
(j) a low level of energy performance in buildings.
The Government of the Republic of Lithuania has issued Regulation No 428 Regarding
Determination Criteria of Problematic Territories of 8 April 200324, under which competent
authorities are obliged to define these territories. At the moment mainly criteria of
unemployment rate and of a number of low-income persons are applied and, accordingly,
the following territories are currently defined as problematic: districts of Akmen÷,
Druskininkai, Ignalina, Jonava, Joniškis, Jurbarkas, Kelm÷, Lazdijai, Mažeikiai, Pasvalys,
Rokiškis, Skuodas, Šalčininkai, and Švenčionys25. All major cities, in which most
universities and student dormitories are situated, are not included in this list. For the
purposes of modernisation of student dormitories, possibility to introduce more relevant
criteria (e.g. a comparatively low level of housing value or a low level of energy
performance in buildings) for determination of these territories may be considered.
2. The allocation to housing expenditure shall be either a maximum of 3% of the European

Regional Development Fund allocation to the operational programmes concerned or 2% of
the total European Regional Development Fund allocation.
3. Expenditure shall be limited to: (i) multi-apartment housing or (ii) buildings owned by
public authorities or non-profit operators for use as housing designated for low-income
households or people with special needs.
Under applicable Lithuanian legislation there is no specific provision indicating that student
23
Council Regulation (EC) No 1828/2006 of 8 December 2006 on the rules for the implementation of Council
Regulation (EC) No 1083/2006 on the European Regional Development Fund, the European Social Fund and the
Cohesion Fund and of European Parliament and Council Regulation (EC) No 1080/2006 on the European Regional
Development Fund, Official Journal, 2006, L 371, P 1-183 (with later amendments).
24
Regulation of the Government of the Republic of Lithuania No 428 of 8 April 2003 on the Determination of
Criteria for Problematic Territories (Official Gazette No 35-1483, 2003; No 14-479, 2006).
25
Ministry of the Interior of the Republic of Lithuania website: http://www.vrm.lt/nrp/index.php?id=216, accessed
on 6 January 2010.
21
dormitories are not multi-apartment housing. However, while interpreting the applicable
legal acts (e.g. the abovementioned Technical Regulation for Construction STR
1.01.09:2003 “Classification of Buildings according to their Purpose”), there is a clear
distinction between housing that has apartments and housing for certain social groups (e.g.
dormitories for students, orphans, monks etc.). Accordingly, national legislation presupposes
that student dormitories may not be treated as multi-apartment housing.
As for the possibilities to determine student dormitories as social housing, it may depend on
the criteria, under which places in dormitories are allocated for the students. Under the
current practice, the priority is given to those students who are from low-income families,
however, this is not a single condition to be taken into account and a number of other
students are also admitted to dormitories. Additionally, it is highly questionable if students,
as a particular social group, may be treated as persons with special needs.
Accordingly, only energy efficiency improvements as it is defined in Article 7.1(a) of

Regulation No 1083/2006 may be performed in student dormitories because currently at least
two conditions specified in Article 7.2 may not be met.
2.1.4. Required amendments of legal acts
Although applicable legal acts allow financing modernisation of student dormitories from the
funds of JHF, the following documents still have to be amended in order to extend
modernisation of multi-apartment buildings to additional modernisation of student dormitories:
a. Regulation No 787 of the Government of the Republic of Lithuania regarding Confirmation

of the Annex to Cohesion Promotion Operational Programme dated 28 July 2008, Official
Gazette No 95-3720, 2008 (with later amendments).
b. Funding Agreement between European Investment Bank, Ministry of Finance of the
Republic of Lithuania and Ministry of Environment of the Republic of Lithuania.
In order to have a possibility to use the funds of JHF for modernisation of other buildings that
are under the jurisdiction of Ministry Education and Science of the Republic of Lithuania certain
amendments the Operational Programme may be required. For the revision of operational
programmes provisions of Regulation No 1083/2006 should be applied. Article 33 of respective
regulation specifies procedure and exact cases when operational programmes may be revised. In
any case separate decision of the European Commission will have to be obtained. Additionally,
the above mentioned Regulation No 787 of the Government of the Republic of Lithuania and
the Funding Agreement should also be revised.
22
3. FUND STRUCTURE
3.1. Stakeholder analysis
The stakeholder analysis as presented below is based on information collected during the
interviews and information available in various official documents and legal acts. Official
functions relevant to the process of renovation of student dormitories and other buildings under
the jurisdiction of the Ministry of Education and Science and institutional interests and
preferences are presented for each stakeholder separately.
3.1.1. Ministry of Education and Science
Ministry of Education and Science of the Republic of Lithuania shapes and implements state
education policy, takes responsibility for education quality, and drafts Strategic education plans
and annual Education action programs. It submits proposals and draft resolutions to the
Government concerning the drafting and improvement of laws and other legislative acts,
funding of education, material supplies and property of schools and disposal of schools’ assets,
founding, reorganization, liquidation and restructuring of the state-run higher education
institutions, and issues permits and issues permits for education institutions to carry out study
programmes. Within the framework of state education policy, the Ministry coordinates activity
of education departments of county and municipal administrations.26 It establishes vocational
schools, non-formal adult education schools, and, if necessary, the schools to satisfy nation-
wide student education (learning) needs (for example, national arts schools, special education
schools, etc.) and institutions providing assistance to students, teachers and schools. It does so
with the written approval of the Minister of Finance27. State higher education institutions
(universities and colleges) are also under the jurisdiction of the Ministry of Education and
Science. However, the Ministry of Education and Science does not manage property of state
higher education institutions, as the State (Government) transfers its property directly to the
state education institutions under a trust agreement28.
To date, the renovation of student dormitories has been financed by the State Investment
Programme in the form of grants. During an interview with the representatives of the Ministry
of Education and Science, the consultants were warned that the higher education institutions
continue to prefer “the old ways” of grant allocations from the State Investment Programme to
the revolving loan schemes such as JESSICA instruments and that the success of JESSICA for
renovation of student dormitories therefore will fully depend on the irreversible entrenchment
of the policy line by the Government that all investments generating return should be
channelled through the loan schemes. The officials of the Ministry at the same time recognized
that the harder budget constraints (i.e. the transition from the grant schemes to loan schemes)
may help the higher education institutions to learn to manage their property.
26
Article 56(1, 2, 3, 4, 10) of the Law of the Republic of Lithuania on Education No IX-1630 of 17 June 2003
(adopted by the Seimas of the Republic of Lithuania (Official Gazette No 63-2853, 2003)).
27
Article 42(1) of the Law of the Republic of Lithuania on Education No IX-1630 of 17 June 2003 (adopted by the
28
Law on Science and Studies of the Republic No XI-424 of 30 April 2009 (adopted by the Seimas of the Republic
of Lithuania (Official Gazette No 54-2140, 2009)).
23
The funds for renovation of dormitories allocated from State budget were insufficient29, and
most of dormitories still are in poor condition, and need to be renovated as soon as possible30.
It should be noted that current budgetary institution status of higher education institutions
excludes the possibility to borrow. According to the laws in force, budgetary institutions have
no right to borrow. The present situation will change before 2012, when higher education
institutions will change their status from budgetary institutions to public companies31, but even
then borrowing limits will be applied to them.
According to the Ministry, energy efficiency measures are important to install, but additional
measures in order to improved student welfare conditions in dormitories and in their territories
are extremely significant too, because most of dormitories do not meet hygiene norms and
formally even can not be operated. A possibility to install not only energy efficiency measures,
but also to perform complex renovation would strongly motivate higher education institutions
to borrow or to participate in the borrowing schemes.
3.1.2. Ministry of Finance
According to the Governmental Resolution32, the Ministry of Finance of the Republic of

Lithuania is managing, coordinating, certifying and paying authority of the EU structural
funds. The Ministry of Finance is also responsible for implementation of financial engineering
measures. As managing authority, the Ministry is participating in the scheme of renovation of
housing for energy efficiency in Lithuania.
As to the renovation of dormitories, the interests of the Ministry of Finance are few-fold. First,
the Ministry takes a view that public investments generating return should be channelled
through loan schemes (instead of previously used grants) as much as possible. This naturally
brings a question of applicability of JESSICA instruments to a range of public investment
issues. Second, the Ministry of Finance is interested in solving the problem of renovation of
dormitories through employment of the JESSICA holding fund, albeit in a way as close as
possible to the neutral effect to the public debt and budget deficit. Third, in terms of the
possible start of dormitory renovation schemes, it should begin as soon as possible. Real
possibilities to renovation of dormitories through loan schemes is expected to motivate higher
education institutions to change their current status of budgetary institutions into public
companies faster than the deadline of 1 January 2012 (as mentioned above, to the legislation in
force, budgetary institutions cannot borrow).33 And finally, ideally the schemes should target
solution of all renovation problems and aim at complex renovation, but only if that is not
possible they should aim at solving of the energy efficiency measures within the limits of
JESSICA instrument.
3.1.3. Ministry of Environment
29
While the Government actually invested the forecasted amounts during 2006–2009 in the framework of its own
Programme for Renovation of Student Dormitories of Higher Education Institutions (LTL 50.5 million actually
spent against a forecast of LTL 44 million), it is evident from the calculations presented in Section 3 of this study
that a lot more will be needed in order to complete the renovation process.
30
Interview with representatives of the Ministry of Education and Science of 28 December 2009.
31
Viešoji įstaiga in Lithuanian.
32
Resolution of the Government of the Republic of Lithuania No 1139 of 9 September 2007 on Allocation of
Functions and Responsibilities of Authorities for the Implementation of the Lithuanian Strategy for the use of EU
Structural Assistance Strategy for 2007–2013 and Operational Programmes (Official Gazette No 114-4637, 2007).
33
Interview with representatives of the Ministry of Finance of 7 January 2010.
24
Ministry of Environment of the Republic of Lithuania forms the state policy of environmental
protection, forestry, utilization of natural resources, geology and hydrometeorology, territorial
planning, construction, provision of residents with housing, utilities and housing, as well as
coordinates its implementation. The goals of the Ministry of Environment are (1) to ensure a
proper environmental quality taking into account the norms and standards of the European
Union, (2) to ensure the rational use of natural resources (including forests) and its further
increase, to preserve biological diversity, natural heritage, landscape identity, (3) to ensure
sustainable development of construction and housing sectors, and extend housing options for
all social groups of residents.34
The Ministry of Environment as intermediary authority is responsible for implementation of

certain measures of Lithuanian Operational Programme for Promotion of Cohesion for 2007 –
2013, among others, the measure VP3-1.1-AM-01-V Holding Fund for the Modernization of
Multi-Apartment Houses (within Priority 3.1 „Local and Urban development, cultural heritage
and nature conservation and adaptation for tourism development“), and the measure VP3-1.1-
AM-02-V Promotion of modernization of Multi-Apartment Houses (within Priority 3.3
„Environment and sustainable development“).35
The Ministry of Environment coordinates implementation of the measures of the Programme

for renovation (modernization) of multi-apartment houses36 (the funds for implementation of
the programme have been allocated from EU Structural funds too through JESSICA initiative)
and is responsible for implementation of the financing model for renovation of multi-apartment
houses. Together with the Ministry of Finance and European Investment bank, the Ministry of
Environment has established a Holding Fund (HF), which provides loans to residents seeking
to renovate their housing37.
3.1.4. Higher education institutions (universities and colleges)
State universities in Lithuania are established by the Seimas (Parliament) of the Republic of
Lithuania upon proposal from the Government. State colleges are established by the
Government upon proposal from the Ministry of Education and Science.38 Higher education
institutions are under jurisdiction of the Ministry of Education and Science in terms of
implementation of the State education policy, but enjoy the autonomy in their academic,
administrative, economic and financial management activities, based on the principle of self-
government, and academic freedom. In accordance with the Constitution, the Law on Science
and Studies, and other national legislation, the autonomy of higher education institutions is
checked by accountability of these institutions to the public and to its founders.39 The State
(Government) transfers its property the state higher education institutions under a trust
agreement,40 so that they use the transferred asset (property) for implementation of their
functions.
34
Ministry of Environment of the Republic of Lithuania website: www.am.lt.
35
Ministry of Environment website of the Republic of Lithuania website: www.am.lt.
36
Resolution of the Government of the Republic of Lithuania No 243 of 5 March 2008 on replacement of the
Resolution No 1213 of 23 September 2004 on apartment-house modernization program (Official gazette No 36-
1282, 2008).
37
Apartment-house modernization program website: www.atnaujinkbusta.lt, accessed on 14 January 2010.
38
39
Article 7(1) of the Law of the Republic of Lithuania on Science and Studies No XI-242 of 30 April 2009
40
Article 80 of the Law on Science and Studies of the Republic of Lithuania No XI-242 of 30 April 2009 (adopted
by the Seimas of the Republic of Lithuania (Official Gazette No 54-2140, 2009)).
25
According to the results of interviews held with two higher education institutions (Vilnius
University and Vilnius College)41 renovation of dormitories is necessary as most of the
dormitories are in poor condition. Energy efficiency measures are important to install, but their
importance is decreasing over time as institutions make their own investment. However, other
renovation measures aiming at improving the general welfare in the dormitories and around
them are acutely important as most of the dormitories do not meet hygiene norms and actually
can not be operated. For example, only 1 of 10 dormitories of Vilnius College and 5 of 18
dormitories of the Vilnius University have obtained mandatory hygiene permits for operation.
Environmental rehabilitation, pavements, the parking lots or garages, financing for sports
grounds or sports complexes for students would be also relevant.
Both higher education institutions would be interested to seek greater energy efficiency and
invest more in order to save as much as possible after the renovation. Due to the heat and
electricity price increase it is necessary to start renovation of dormitories as soon as possible.
Physical condition of dormitories is deteriorating every year. Both institutions indicated a
preference for fast application of investment schemes. They find it difficult to wait until 2012,
when higher education institutions will become public companies with the right to borrow on
their own (subject to restrictions). Vilnius University has already developed technical projects
for the renovation of dormitories, which allows rapid start of renovation works.
As it was stressed during the interviews, higher education institutions would strongly prefer
grants for renovation of dormitories, and would agree to borrow for renovation only if grants
are not available. This suggests that the appropriate policy line should be adopted by the
Government about financing of dormitories renovation.
3.1.5. Authorized agencies
According to the Regulation 1828/2006, the body implementing functions of an urban

development fund (UDF) is needed in the JESSICA scheme. Urban development funds (UDFs)
are the most important tool for JESSICA implementation. The UDFs are financial engineering
instruments which directly invest into public-private partnerships and other contractual
arrangements relating to urban development and other projects incorporated into integrated
plans for sustainable urban development42.
Authorized agencies such as the Housing and Urban Development Agency (HUDA) or the
Central Project Management Agency (CPMA), if authorised by the Government, could carry
out the functions of Urban Development Funds (UDFs).
Housing and Urban Development Agency (HUDA) is a budgetary institution founded by the
Ministry of Environment to ensure the implementation of programmes and measures defined in
Lithuanian Housing Strategy. The HUDA is responsible for housing programmes,
administration and the effective management of the housing system and economic
development, land planning and urban development regulatory development functions. The
activities of the HUDA are financed from the state budget.
41
Interview with representatives of the Vilnius University of 4 December 2009; Interview with representatives of
the Vilnius College of 18 December 2009.
42
Article 46 of the Council Regulation (EC) No 1828/2006 of 8 December 2006 on the rules for the
implementation of Council Regulation (EC) No 1083/2006 on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and of European Parliament and Council Regulation (EC) No
1080/2006 on the European Regional Development Fund, Official Journal, 2006, L 371.
26
HUDA is in charge of the development of concepts for urban planning, effective management
and maintenance systems for housing, promotion of effective use of energy, and enhancement
of energy-efficient modernisation of private and public buildings. The HUDA administers the
Multi-Apartment Houses Modernisation Programme and the support provided under it,
prepares and implements investment programmes and investment projects for residential
houses, social and public buildings. The HUDA provides support to municipalities, building
administration and maintenance companies, home owners by 1) providing consultations on
legal, technical, financial, organizational and other questions related to housing and urban
planning; 2) preparing and implementing investment programmes and investment projects for
residential houses, social – public buildings; 3) signing agreements with credit institutions,
issuing credit insurance or loan guarantees for the beneficiaries of the Multi-Apartment
Modernisation Programme. The HUDA is also responsible for the evaluation of the prepared
investment projects, procurement of contracted works, and for ensuring the compliance of the
works carried out with the requirements of the programme. The HUDA has ten regional
departments (subdivisions) located in ten key cities, and that the information about housing
modernisation projects and urban development issues could be available in every region of the
country43.
The first JESSICA feasibility study has identified the HUDA as one of the possible institutions
to carry out the functions of UDF44 and indicated the HUDA as the most possible example of
an institution to be assigned (by virtue of national legal act) with the functions of UDF for the
purposes of JESSICA45.
HUDA participates in the implementation of JESSICA programme46 for renovation of multi-

apartment houses. Through its regional departments located in ten major cities of the country,
HUDA provides advice and technical assistance to owners of housing on renovation
(modernization) of multi-apartment houses, evaluates and approves the investment plans,
contract documents, cooperate with local governments, engineering consulting firms,
implements other activities related to the program.
Central Project Management Agency (CPMA) was also considered as potential candidate to
carry out the functions of the UDF47. CPMA is a public company and is an institution
established by the Ministry of Finance. It is tasked to ensure efficient management of financial
assistance funds provided by the European Union, international financial institutions and other
international and local support providers. The agency was established in 2003 through a
merger of two organizations – the Central Financing and Contracting Unit (CFCU, established
in 1998) and the Housing and Urban Development Fund (HUDF, established in 1996). The
CFCU was responsible for the projects financed by EU PHARE/ ISPA programmes whereas
the HUDF was implementing programmes financed by international finance institutions, such
as the World Bank, National Irish Bank, EIB, EBRD, etc. The CPMA provides services and
assistance to a wide range of public and private entities such as ministries and other
governmental institutions, municipalities and municipal enterprises, private businesses. The
CPMA is the implementing agency for the many programmes, including the EU Structural
Funds measures in education, health, social, information and technologies and urban sectors for
the Financial Perspective 2007–2013. After the implementation of the pilot projects, the
CPMA has got the approval of the Government to carry out the functions of the Central
43
Housing and Urban Development Agency (HUDA) website: www.bkagentura.lt.
44
JESSICA Evaluation Study for Lithuania, January 2009, P. 152-153.
45
JESSICA Evaluation Study for Lithuania, January 2009, P. 166.
46
Apartment-house modernization program website: www.atnaujinkbusta.lt, accessed on 12 January 2010.
47
JESSICA Evaluation Study for Lithuania, January 2009, P. 10.
27
Purchasing Organization (CPO) in September 2008.
CPMA is implementing measures under the Operational Programme for Economic Growth for
2007–2013 (for example, the Priority 2.1 „Research and Technological Development for the
Competitiveness and Economic Growth“, which CPMA as implementing authority manages
together with the Ministry of Education and Science). The CPMA is also implementing
authority of three priorities under the Operational Programme for Promotion of Cohesion for
2007–2013, i.e., Priority 3.1 “Local and urban development, cultural heritage and nature
preservation and adaptation for the development of tourism” which includes measures such as
„reducing the difference of living environment and the quality between the main cities and
other cities of the country and accelerating the diversification of economic activities in rural
areas; “Housing development in problem areas” (the measures are managed together with the
Ministry of the Interior).
CPMA could be involved in implementation of JESSICA instruments for energy efficiency in

student dormitories, for example, as an institution performing the functions of a UDF, subject
to relevant authorization under the national legislation. It is probably the most capable
institution of its kind. It has in-depth experience in management of the EU financed
programmes and projects, implementation of quality assurance and control system
requirements, and, what is more, possesses necessary financial, economic, managerial and
technical expertise. It is also experienced in managing financial instruments, similar to those
under JESSICA, e.g., loans. It ceased to do that in 2007, but at the time the CPMA used to
provide loans and relevant project appraisals, i.e., evaluated the recoupment of investments,
determined co-financing sources, assessed the implementation of projects, and acted in other
capacities. In 2004 the CPMA was given Extended Decentralised Implementation System
accreditation by the European Commission.48
The Ministry of Education and Science has closely and successfully worked with the CPMA
while implementing various investment programmes (for example, School Improvement
Programme), and during the interview for the purposes of this study the Ministry of Education
and Science has indicated that they want to build on the successful and productive cooperation
with the CPMA, and would be ready to work with it during renovation of the dormitories49. In
the Ministry’s view, the CPMA as the CPO may run the selection procedure of service
provider (concessionaire or contractor, according to the chosen scheme).
3.1.6. Energy service companies (ESCO)
Companies providing heating services could participate in JESSICA funding scheme for
renovation of dormitories through an ESCO model. They could borrow JESSICA funds to
install energy efficiency measures in buildings (dormitories), and would repay the loan from
savings receiving in return an agreed margin. The interests and rights of the Lithuanian District
Heating (DH) utilities, organisations and others associated energy structures in the DH sector
are represented by the Lithuanian District Heating Association (LDHA). LDHA unites 41
members, of which 32 are DH companies, which produce and supply around 99% of the total
heat through the DH network in Lithuania, and 9 are companies whose activities are closely
linked to the heat sector.
There are no restrictions for energy service companies to participate in the scheme, but the
question whether energy supplier would be interested to invest into project decreasing
48
JESSICA Evaluation Study for Lithuania, January 2009, P. 153–154.
49
Interview with representatives of the Ministry of Education and Science of 28 December 2009.
28
consumption of the energy remains. The consultants sent a formal request to LHDA explaining
the purposes of this study and asking specific questions about the motivation of the LHDA
members to participate in a possible ESCO scheme. At the time of drafting of this report the
LHDA replied that this letter was forwarded to all members but no replies were received. It
thus can be concluded that the district heating companies are not actively interested in
participating in an ESCO scheme for dormitory renovation.
3.1.7. Potential concessionaires
Private companies providing building maintenance (building administration) services could

participate in JESSICA funding scheme for renovation of dormitories as concessionaires. A
concession is defined by the Law on Concessions as an authorization granted by the awarding
authority to the concessionaire in compliance with the concession contract, to engage in the
economic activity relating to the design, construction, development, renovation,
transformation, repairs, management, use and/or maintenance of infrastructure objects, to
provide public services, manage and/or use state-owned or municipal property where the
concessionaire assumes under the concession contract all or part of the operating risk and
undertakes the relevant rights and duties50.
There are several private companies providing building maintenance services, based mostly in
Vilnius, but also operating in the regions (City Service AB, Dota UAB, Tukompa AB,
Adminsta UAB, Vit÷s valdos UAB, Panev÷žio butų ūkis AB). City Service AB is the leading
company in Lithuania providing building maintenance services for private and corporate
customers. For private customers apartments it provides building administration, including
administration of multi-dwelling buildings, building energy efficiency certification, technical
maintenance, construction maintenance, repair works of residential buildings by instalments,
administration of renovation projects, cleaning services. For corporate customers facilities
management services are provided by company to ensure full building maintenance starting
from maintenance of engineering equipment, power resource management to in-house cleaning
and security (i.e. building maintenance administration, building energy efficiency certification,
engineering equipment maintenance, occupational safety, security services, cleaning services).
The company is operating in Vilnius, Kaunas, Klaip÷da, Šiauliai, Panev÷žys, Alytus, Palanga,
Šilut÷ and Pag÷giai providing services for private customers, and throughout Lithuania for its
corporate customers.
During an interview with City Service AB,51 the company expressed a strong interest in
participating in the JESSICA funding scheme for renovation of dormitories, and finds
concession model as most favourable for renovation of dormitories, especially in terms of
possibility to install not only energy efficiency measures (which would be financed from
JESSICA funds), but also to raise additional (private) funds for other measures of complex
renovation of dormitories, which seem to be very important to universities/colleges and
vocational education institutions. In its view, such combined investments would enable full
renovation of the buildings, while management by professional administrators would motivate
them to propose and provide additional services for students.
Municipal enterprises (i.e. companies founded by municipalities) also provide building

administration services (for example, Senamiesčio ūkis UAB, Šnipiškių ūkis UAB, etc.) in the
respective cities by the order of the director of municipal administration. In recent years most of
50
Article 2(1) of the Law of the Republic of Lithuania on Concessions No IX-1647 of 24 June 2003 (adopted by
the Seimas of the Republic of Lithuania (Official Gazette No 70-3163, 2003)).
51
Interviews with representatives of City Service AB of 10 December 2009 and 21 December 2009.
29
these companies have been reorganized into limited liability companies (UAB). As student
dormitories of general education schools did not fall within the focus of this study, only a
preliminary assessment as regards possible legal restrictions for borrowing by these companies
could be made. It shows that there are no legal provisions which would prohibit municipal
companies or limited liability companies controlled by municipal administrations from
borrowing. However, their ability to invest into complex renovation of dormitories could be
limited due to limited funds they own. For these reasons municipal companies are not likely to
be strong participants of the concession scheme, where the main idea and strength of the scheme
is raising of private funds for complex renovation of dormitories.
3.1.8. Municipalities (as founders of secondary schools)
Municipalities are responsible for organisation of general education, vocational training and
vocational guidance of children, youth and adults (founding, reorganization, liquidation,
maintenance of educational establishments, organisation and implementation of teaching
according to the programmes of formal education52. The municipal representative institution
(Council) implements State education policy in the municipality. It establishes, reorganises,
liquidates or restructures the schools53.
Municipalities are founders of 98% of general education schools54, and they are fully
responsible for their management and administration. Funds for the implementation of these
functions are foreseen in municipal budgets. According to the Law on Budget Structure
municipalities can take long-term domestic or foreign loans or provide guarantees for loans to
be used only to finance investment projects, but the borrowing is possible only in accordance
with borrowing limits approved by the Seimas (Parliament) of the Republic of Lithuania. 55 In
terms of number (but not in size), municipalities own quite a few general education school
dormitories,56 but their interest in utilizing the JESSICA funding instruments could not be
assessed because of the very tight deadlines for preparation of this study, which demanded that
the most urgent needs of higher education institutions and vocational education and training
institutions are tackled first. Therefore the interviews with the representatives of municipalities
were not held.
3.1.9. Banks
Commercial banks can have interest to participate in JESSICA instrument for renovation of
student dormitories, and attract additional (their own) financial resources to the renovation of
dormitories, especially as regards complex renovation measures as noted above. However,
their role would be very similar to the renovation scheme of multi-apartment buildings, where
their real capacity and intentions are still to be tested. Due to very tight deadlines of study
preparation the interviews with the representatives of commercial banks were not held.
52
Article 6(6) of the Law of the Republic of Lithuania on Local Government No X-1722 of 15 September 2008
53
54
Interview with representatives of Ministry of Education an Science of 28 December 2009.
55
Article 10 (1) of the Law of the Republic of Lithuania on Budget Structure No IX-1946 of 23 December 2003
56
According to data supplied by the Centre of Information Technologies for Education (www.itc.smm.lt), in the
beginning of the 2009–2010 academic year there were 111 student dormitories belonging to general education
schools in Lithuania, of which about 50% belonged to the schools providing general education for students with
special needs.
30
3.2. Institutional scheme: the question of the Urban Development Fund
In view of the strong preference of the Ministries of Finance and Education and Science that
renovation of student dormitories through the use of the JESSICA instrument is started as soon
as possible, this study suggests that the current institutional set up is maintained and that a
financial institution (i.e. a bank or banks) serve the function of the Urban Development Fund
(UDF) as for renovation of multi-apartment houses. During the research for this study, the
maintenance of the current option was assessed against another possible option, namely, the
assignment of the function of the UDF to an existing institution by virtue of a national legal
act. There are several reasons why a different UDF than in the case of multi-apartment housing
could be desirable. First, renovation of student dormitories could be seen as a more planned
operation. Second, it should not only tackle the issue of energy efficiency in these buildings at
present time, but should assess the demand for such renovated housing among the students in
the future. Since higher, vocational and general education systems of Lithuania have been
undergoing reforms for a long time, the question of finality and optimality of the existing
network of schools should be addressed so that the scarce resources are invested only in the
buildings of the schools needs which would be operated for long enough. And finally, a set up
of an UDF within the existing institution would help to deliver the necessary technical
assistance better.
However, the Ministry of Education and Science did not indicate to the consultancy team that
optimality of the education institutions at all levels (higher, vocational and general education)
was an important issue which should affect the choice of a different UDF than existing
institutional scheme.
Also under the Law on Financial Institutions of the Republic of Lithuania57, only financial
institutions are eligible to provide financial services on continuous basis. Lending and
providing factoring are financial services. Thus, if such services are provided on continuous
basis, as a general rule, entity providing such services must be financial institution. However,
Article 1.3 of the Law on Financial Institutions stipulates that this law is not applicable to state
and municipal institutions and establishments which provide financial services under the laws
of the Republic of Lithuania. Thus if the chosen scheme includes lending or providing
factoring services, the Urban Development Fund functions may be undertaken either by
financial institution, state or municipal institution or establishment, which is entitled to provide
financial services by law.
By virtue of Article 1 of the Law on Lending by Economic Entities to Natural and Legal
Persons58, the ability of non-credit institution to provide financing to natural and legal persons is
limited by the amount of the authorized capital of the financing entity. It should be noted, that
the Government of the Republic of Lithuania has proposed a law revoking this law.
Though not insurmountable, these legal issues would prolong selection and appointment process
of a different (than existing) UDF. It would be so also not least because none of the analyzed (in
January 2009 first JESSICA feasibility study in Lithuania) candidates among the existing
57
Law of the Republic of Lithuania on Financial Institutions No IX-1068 of 10 September 2002 (adopted by the
Seimas of the Republic of Lithuania (Official Gazette No 91-3891, 2002)), with later amendments.
58
Law of the Republic of Lithuania on Lending by Economic Entities to Natural and Legal Persons No I-226 of 15
July 1993 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 31-714, 1993)), with later
amendments.
31
institutions to which this function could be assigned by a virtue of a national legal act fully
meets the criteria of an institution capable to take on the function of an UDF.
And finally, one of the five possible financial schemes analyzed in this study (see Section 4),
namely, factoring scheme is possible only with a bank acting as an UDF and provider of
factoring services.
3.3. Analysis of the current situation: basic data about students, student
dormitories and other buildings under the jurisdiction of Ministry Education and
Science for consideration of eligibility for JESSICA instruments
3.3.1. Number of students (higher education institutions, vocational training, secondary

schools)
Table 3. Number of students in the beginning of the academic year

Higher Vocational
General
Date Total education education
schools
institutions institutions
Public education institutions
2005–2006 1,618 31 74 1,513
2006–2007 1,586 31 78 1,477
2007–2008 1,557 31 78 1,448
2008–2009 1,497 30 78 1,389
Number of students
2005–2006 763,564 181,282 46,283 535,999
2006–2007 737,641 180,998 45,342 511,301
2007–2008 710,577 180,866 43,832 485,879
2008–2009 688,747 184,872 43,771 460,104
Sources: Department of Statistics of Lithuania, and its publications Education 2008 and Statistical Yearbook of
Lithuania 2009.
According to the data of Department of Statistics of Lithuania, in 2008, 78.6% graduates from
upper secondary school pursued higher education studies in colleges and universities (see Figure
1). A total of 47,926 students were admitted to bachelor level studies (of which 29,544 to
universities and 18,382 to colleges).
Figure 1. Further education of general upper secondary school graduates
32
90
78.6
80 74.8 74.2
71.6
70
60 Graduated from upper secondary

school and continue s tudies in
Per cent
50
colleges and universities
40 Graduated from upper secondary
school and continue s tudies in
30
vocational s chools
20
10.2 9.2
10 6.8 5.2
0
2005 2006 2007 2008
Source: Statistical Yearbook of Lithuania 2009 (Department of Statistics of Lithuania)
It is important to note that a very significant part (74%) of all dormitory applicants was admitted
to the dormitories (see Table 2). In absolute figures, the number of students, who applied for a
place at a dormitory remained on comparable levels since 2005.
Table 4. Demand and supply of places in university student dormitories (in the beginning of the
academic year)
Statistical indicator 2005–2006 2006–2007 2007–2008 2008–2009
Number of student applicants for a dormitory 26,257 27,328 27,264 27,692
Number of students admitted to dormitories 21,055 20,763 20,489 20,503
Ratio of supply to demand, % 80.2 76.0 75.2 74.0
Source: publication Education 2008 of the Department of Statistics of Lithuania.
3.3.2. Basic data about student dormitories: number of dormitories, occupancy ratio,
construction dates and compliance to the hygiene norms
This part draws heavily on the findings presented in two unpublished reports of the Ministry of
Education and Science, namely, Renovation Programme of Student Dormitories of Higher
Education Institutions (stage 2) (October 2009), and Investment Project of Renovation of
Student Dormitories Managed by Vocational Education Institutions (June 2008). Territorial
distribution of students’ dormitories is presented in Annex 8.
3.3.2.1. State higher education institutions
On 30 September 2009, there were 28 state institutions providing higher education, of which 15
were universities and 13 colleges. Among themselves, they had 124 student dormitories (of
which 45 belonged to colleges and 79 to universities). A total of 28,068 students lived in all
dormitories on 30 September 2009 at a rather high – 92% – average occupancy rate, compared
to the existing accommodation capacity (30,639 places). Although average occupancy rate in
university and college student dormitories differs by 10%, about one quarter (29) of all student
dormitories were fully occupied, while another 45% (or 54 buildings) were occupied at a rate
33
exceeding 90%. However, there were outliers too. For example, student dormitory No 3 of the
University of Šiauliai (Dubijos g. 1A, Šiauliai) was overcrowded and at the end of September
2009 hosted 216 students against its maximal capacity of 193 places (occupancy rate – 112%).
At the other extreme, occupancy ratio in one of Marijampol÷ College dormitory (Armino g. 94,
Marijampol÷) and one dormitory of Vilnius College (Giedraičių g. 61, Vilnius) was only 39%
(correspondingly 110 students to 280 places and 42 students to 108 places). For distribution of
student dormitories of Lithuanian state higher education institutions according to the occupancy
ratio see the Figure 2.
Figure 2. Occupancy rates at student dormitories of Lithuanian state higher education

institutions
Number of universities–managed students ' dormitories Number of colleges–managed students' dormitories

30
Number of students' dormitories, units
24
25
20
20 18
15
9 9
10 7 7
6
5
4 3 3
5 2 1
1 1
0 0 0 0
0
39-50 51-65 66-70 71-75 76-80 81-90 91-95 96-99 100 112
Accommodation intencity of students ' dormitories , %
Source: Renovation Programme of Student Dormitories of Higher Education Institutions (stage 2), October 2009.
An unpublished study of the Ministry of Education and Science of the Republic Lithuania
Dormitories were built in different periods (1905, 1931–1940, 1953–1989, 1996) and following
the then applicable construction standards and rules. Since then, regulatory construction
requirements have changed, equipment and systems maintaining the optimal microclimate in
buildings have morally outdated and physically worn out. Some of the university dormitories
have been renovated. Higher education institutions use their income received from
accommodation services as well as other funds to maintain and repair dormitories. However,
these funds are not sufficient for renovation of dormitories. 83% of the funds received from
accommodation services are used to pay for administration and utilities of dormitories, 16% for
maintenance and 1% for other necessities.
The newest among the 120 student dormitory buildings is one of the dormitories belonging to
Mykolas Riomeris University. It was built in 2001 (Valakučių g. 5, Vilnius), while the oldest
one belongs to Vytautas Magnus University in Kaunas (Muitin÷s g. 7, Kaunas), which was built
in 1850. In the category of college dormitories, the newest one was built in 1990 and is operated
by Panev÷žys College (Klaip÷dos g. 31, Panev÷žys), and the oldest one was built in 1956 and
belongs to Vilnius Technology and Design College (Antakalnio g. 56, Vilnius). Figure 3 shows
that more then half (69) of the student dormitories are in operation already for 29–49 years.
Figure 3. Distribution of dormitories of state higher education institutions according to their

construction date
34
Number of univers ities–managed students' dormitories Number of colleges–managed students' dormitories
Number of students' dormitories, units 25
20
20 18
16
15
15 14
10 9
7
6
5 4
3 3
2 2 2
0 0 0 0
0
1850-1905 1906-40 1951-60 1961-70 1971-80 1981-85 1986-90 1991-95 1996-2000
Students' dormitories cons truction date
Source: Ministry of Education and Science of the Republic Lithuania // Students dormitories of higher education
institutions renovation program (II stage), October of 2009.
Currently, there are two types of dormitory management: most of the dormitories are managed
by universities and colleges, while some of those belonging to the Vilnius University and
Vilnius Gediminas Technical University have been transferred under trust agreements to public
companies established by universities and student representations.
According to the Classifier of Economic Activities (rev. 1.1)59, accommodation in student

dormitories is assigned to 55.23.20 subcategory „provision of other lodging places“. It was
included in the list of commercial activities, for which possession of a hygiene permit (passport)
was mandatory.60. The right to engage in activities referred to in the abovementioned list is
permitted only with possession of, and in accordance with the terms of the permit (hygiene
passport) which has to be renewed every five years. Possession of the hygiene permit (passport)
testifies that the conditions of commercial activity meet the public health safety requirements,
and gives the holder the right to carry on with their business. According to the data of the
Register of Authorizations and Hygiene Passports (managed by the State Public Health Service
under the Ministry of Health)61, only 10 of 30 or 33% higher education institutions possess the
necessary hygiene permits (passports), and, among the buildings, the ratio of compliance is very
similar, as out of 124 dormitories only 34 have the hygiene passports.
It is important to note that as of 1 January 2010 accommodation in the student dormitories was
excluded from the list of commercial activities, for which hygiene permits (passports) are
mandatory62.
59
Resolution of the Government of the Republic of Lithuania No 696 of 17 May 1995 on the Classification of
Economic Activities (Official Gazette No 43-1054, 1995).
60
Order of the Minister of Health Care of the Republic of Lithuania No V-791 of 5 October 2007 on Approval of
the List and Permissions – Hygiene Passports Rules for Commercial Activities, for which Hygiene Passports are
Mandatory (Official Gazette No 106-4352, 2007), with later amendments.
61
The State Public Health Service under the Ministry of Health internet metadata file: http://www.vvspt.lt/lhp/,
accessed on 15 January 2010.
62
Order No V-593 of the Minister of Health Care of the Republic of Lithuania of 20 July 2009 on Replacement of
Order of the Minister of Health Care of the Republic of Lithuania No V-791 of 5 October 2007 on Approval of the
List and Permissions – Hygiene Passports Rules for Commercial Activities, for which Hygiene Passports are
Mandatory (Official Gazette No 88-3770, 2009).
35
3.3.2.2. State vocational education and training institutions
According to the data of April 2008, there were 75 state vocational education institutions in
Lithuania. Between them, there were a total of 86 dormitories63, which hosted 9.462 students at
an occupancy ratio of 51% (the maximal capacity stood at 18,578 living places). Places of 6
student dormitories were completed in 10% of all existing living places (students didn’t live in 4
of them!), and only 9 of all student dormitories were fully accommodated (see Figure 4).
Figure 4. Occupancy rates of student dormitories of Lithuanian state vocational education and
training institutions
Number of students' dormitories managed by vocational education ins titutions
16
Number of students' dormitories, units
14 14
14
12
10
10 9
8
8 7 7 7
6
6
4
4
2
0
0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100
Accommodation intencity of students' dormitories, %
Source: Ministry of Education and Science of the Republic Lithuania, unpublished study titled Investment Project
of Renovation of Student Dormitories Managed by Vocational Education Institutions, June 2008
The newest among of 86 dormitories of vocational education and training institutions is

dormitory building built in 2002 at Ukmerg÷ Technology and Business School (Kauno g. 108a,
Ukmerg÷). The oldest dormitory building belongs to the Rehabilitation Centre for Vocational
Training for Students with Hearing Disabilities (Šilo g. 24, Vilnius) It was built in 1958. It is
evident from the Figure 5), that majority student dormitories have been in operation for 33–37
years.
Figure 5. Distribution of student dormitories of state vocational education and training

institutions according their construction date
63
Unpublished study titled Investment project of renovation students dormitories managed by vocational education
institutions, Ministry of Education and Science of the Republic Lithuania, June 2008.
36
Number of students' dormitories managed by vocational education ins titutions
Nubenr od students' dormitories, units 30
25
25
20
20
15 12
11 11
10
5 3 2
1 1
0
0
1958-60 1961-65 1966-70 1971-75 1976-80 1981-85 1986-90 1991-95 1996-2000 2001-2002
Students' dormitories construction date
Source: Ministry of Education and Science of the Republic Lithuania, unpublished study titled Investment project
of renovation students dormitories managed by vocational education institutions, June 2008.
These dormitories were built according to construction norms and regulations of the times.
While over time regulatory requirements changed, and systems for maintenance of the
microclimate became outdated and worn out, student dormitories were not renovated for a long
time. During all operating period there were no renovation works done in as many as 17 student
dormitories. The first major renovation was performed in 1992 on a part of student dormitory of
Panev÷žys Trade and Service Business School (Klaip÷dos g. 146, Panev÷žys). Another instance
of important renovation investment was renovation works in 1997 in 17 student dormitories. In
1997–2007 different volumes of repairing works were carried out in many students dormitories,
but the main part of them were done during period of last seven years (2000–2007). The most
common renovations made were related to the change of windows, change of roofing, insulation
of exterior walls, overhaul of heating points, bathrooms and toilets.
State Public Health Service under the Ministry of Health), only 34 out of 86 dormitories of state
vocational education and training schools possessed the necessary hygiene passports.
Evidently, improvements to the technical condition of dormitories were made by renovations

carried out until 2010. The amounts invested are presented in the Subsection 3.3.5 of this study.
However, it can be still argued that the majority of the student dormitories are still in the
unsatisfactory conditions as most of them:
1. still have outdated, permeable and worn local networks of district heating (outdated,
permeable and worn local networks of district heating result in technical as well as
financial issues. Due to their age, which is over 25 years, there is a high possibility of
accidents. It is recommended to give up old local networks and replace them by underfloor
ones.);
2. still exploit heating system pipes which have not been replaced since the beginning of
exploitation. Moreover, they have systems, the operation of which is not controlled and is
not based on external temperature, and use outdated heating devices, pipes, armatures and
equipment (the existing heating systems require automatic balancing valves and new closing
armature; the location of waterproof line pipes should be changed and line pipes
reinsulated);
37
3. still have outdated and worn cold, hot and circulating water supply and sewage systems
(some of the cold, hot and circulating water supply and sewage pipes should be replaced by
new ones; a solution how to access to them during the operation should be also found. New
closing armatures should be installed when replacing the pipes. Newly-built pipes may be
insulated on demand);
4. do not have mechanical ventilation systems in kitchens, showers and toilets (new sealed
windows cause ventilation problems. Some of the buildings require mechanical ventilation
systems in kitchens, showers and toilets. Air recuperation system may adjusted, if required);
5. have outdated, permeable roofing. Water permeates old roofs and damage interior of
premises (some of the roofs should be replaced either by pitched roofing or hydro-insulating
flat roofing);
6. have a lot of premises which worn out because of a lack of upkeep, rainwater permeating old
roofs, and humidity (premises of the poorest state should be repaired, including taking off
old plaster, mending all cracks, removing fungus with the proper material, flattening,
plastering, daubing and painting of surfaces, replacing flooring);
7. have outdated and worn electric power systems which do not meet the existing demand for
electric power. They also have outdated lighting equipment and low lighting in premises
(some of the lighting equipment should be replaced, and, where required, new electric
power lines installed; installation should be earth-grounded);
8. still have outdated and worn toilets, showers and their equipment (toilets and showers of
extremely poor state require major repairs, including the replacement of the equipment and
all engineering pipes, and complete decoration of premises);
9. have old, worn and uncomfortable kitchens because of a long-term lack of upkeep and
constant humidity (ceiling, walls and flooring should be repaired).
Due to considerable depreciation, almost all dormitories do not meet the following standards:
• Hygiene Norm HN 118:2002 on Health Safety Requirements for Accommodation Services
(adopted by Order No V-2 of the Minister of Health Care of the Republic of Lithuania of 6
January 2003 (Official Gazette No 13-531, 2003))64;
• Hygiene Norm HN 35:2007 on Maximum Permitted Concentration of Chemical Substances
(Pollutants) in Ambient Air of Residential Environment (adopted by Order No V-1191 of
the Minister of Health of the Republic of Lithuania of 5 December 2008 (Official Gazette
No 145-5858, 2008));
• Hygiene Norm HN 42:2004 on Microclimate in Residential and Public Utility Buildings
(adopted by Order No V-479 of the Minister of Health of the Republic of Lithuania of 29
June 2004 (Official Gazette No 105-3911));
• Technical regulations of construction STR 2.01.01(3):1999 on Essential Requirements for
Buildings. Hygiene, Health and Environmental Protection (adopted by Order No 549 of the
Minister of Environment of the Republic of Lithuania of 21 October 2002 (Official Gazette
No 106-4776, 2002));
• Technical regulations of construction STR 2.09.02:1998 on Heating, Ventilation and Air
Conditioning (adopted by Order No 19 of the Minister of Environment of the Republic of
Lithuania of 18 January 1999 (Official Gazette No 13-333, 1999; No 39-1446, 2002; No
145-5552, 2006));
• Technical Regulations of Construction STR 2.01.01(6):2008 on Essential Requirements for
Buildings. Energy saving and heat retention (adopted by Order No D1-131 of the Minister of
Environment of the Republic of Lithuania of 12 March 2008 (Official Gazette No 35-1255,
2008)).
State Public Health Service under the Ministry of Health), the non compliance rate among
64
Bathroom (shower) and toilet premises of general use.
38
various categories of dormitories has been as follows, a) 73% among higher education
institutions (90 out of 124 buildings), b) 61% among state vocational education and training
schools (52 out of 86), and c) 81% among general education schools and schools for students
with special needs (89 out of 111).
Taking into account the information presented above, the provisions65 of Article 36.1 of the Law
on Construction No I-1240 of 19 March 1996 (Official Gazette No 32-788, 1996, as last
amended on 22 September 2009) as well as the findings of the two abovementioned unpublished
reports of the Ministry of Education and Science, it could also be concluded that the warranty
period for these buildings has expired and therefore major repairs are required.66
3.3.2.3. State secondary and special schools
According to the data provided by the Centre of Information Technologies of Education under
the Ministry of Education and Science of the Republic of Lithuania, in the school year
2009/2010 there were 111 dormitories of secondary and special schools in Lithuania.
Information on their total area, condition, renovation needs was not available. Due to the fact
that most of secondary school dormitories are usually located in small towns and can highly
differ by their area, accommodation capacities, it is impossible to evaluate funds needed for
their renovation. In case the data on at least the area of these dormitories is available, the
investment needed can be estimated by using the method of extrapolation, but even then risks to
be very inaccurate.
3.3.3. SWOT analysis for student dormitories
Strengths
• The average occupancy rate of all dormitories managed by all companies is 92%, showing
high effectiveness of the benefits potentially created by the measures to be implemented.
Weaknesses
• The majority of the dormitories have been exploited for 29–49 years without any interior
repair works and only with partial energy efficiency package implemented;
Most of the dormitories:
• still have outdated, permeable and worn local networks of district heating;
• still exploit heating system pipes which have not been replaced since the beginning of
65
The warranty period of a building shall be fixed in contracts, contracts related to construction works design and
technical supervision of construction of a building. Such period may not be less than 5 years (as of the acceptance
of the building as fit for use); for hidden elements of a building (structures, pipelines, etc.) – 10 years, and if defects
which have been deliberately hidden are established – 20 years.
66
Major repairs of a building means repairs of a building, where: worn load-bearing structures of a building
(except load-bearing walls, carcass and foundations which are only reinforced) are replaced with load-bearing
structures with the same or durable and better properties of use, or the existing load-bearing structures are
reinforced; the look of the facades of a building are partly changed (by changing a part of facade elements or by
installing new additional elements – balconies, doors, windows, architectural details, by replacing worn exterior
finish of a building with exterior finish of the same or different type); replacing worn joint engineering systems of
a building or their parts with the systems (elements) of the same type without exceeding their output; installing
separate engineering systems of a building; doing major repairs of technological equipment and technological
engineering systems, engineering and utility networks and traffic routes specified in standards pertaining to the
safety and purpose of a building. Article 20.2 of the Law of the Republic of Lithuania on Construction No IX-583
of 8 November 2001 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 101-3597, 2001)).
39
exploitation. Moreover, they have systems, the operation of which is not controlled and is
not based on external temperature, and use outdated heating devices, pipes, armatures and
equipment;
• still have outdated and worn cold, hot and circulating water supply and sewage systems;
• do not have mechanical ventilation systems in kitchens, showers and toilets;
• have outdated, permeable roofing. Water permeates old roofs and damage interior of
premises;
• have a lot of premises which worn out because of a lack of upkeep, rainwater permeating
old roofs, and humidity;
• have outdated and worn electric power systems which do not meet the existing demand
for electric power. They also have outdated lighting equipment and low lighting in
premises;
• still have outdated and worn toilets, showers and their equipment;
• have old, worn and uncomfortable kitchens because of a long-term lack of upkeep and
constant humidity.
Opportunities
• to renovate dormitories and thus create high quality accommodation services for students
and the microclimate which meets all hygiene standards.
Threats
• due to constantly deteriorating technical state, dormitories will soon be unable to meet
requirements for residential buildings;
• students will refuse to live in dormitories because of poor living conditions and
unsatisfactory microclimate;
• the incapability to provide students with accommodation will reduce the quality of all
services provided by public higher education institutions;
• the incapability to provide students with accommodation will damage the prestige of
public higher education institutions.
3.3.4. The cost of residence in student dormitories against the rent market
This part provides a brief selective comparison between the rent charges in the student
dormitories and rent markets. Rent charges in the student dormitories are inclusive of utilities
and therefore are lower than renting out in the city.
Table 5. Monthly rent exclusive of utilities (flats in old construction multi-apartment houses in
the “sleeping” (remote) districts of the cities) (in LTL)
1 room flat, old 2 rooms flat, old
City construction construction
(30–40 m2) (50 m2)
Vilnius 400 450–500
Kaunas 400 400
Klaip÷da 300–400 400–500
Source: own compilation from the websites of renting agencies. Utilities during the heating season (October to
April) for a 60 m2 flat would cost an extra LTL 470/month.
40
Table 6. Rent prices per student at the dormitories of the Vilnius University and Vilnius College
(inclusive of utilities) (in LTL)
Vilnius
Vilnius University Vilnius Vilnius
University (renovated College (II College (I
Price per one place
(standard and category category
dormitory)* refurbished dormitory) dormitory)
dormitory)*
Single occupancy room 190 – – –
Double occupancy room, two tenants 170 300 180 220
Double occupancy room, one tenant 340 600 110 120
Triple occupancy room, three tenants 150 200 100 110
Triple occupancy room, two tenants 225 330 140 160
* a dormitory supplied bedding costs extra LTL 20/month per person.
Sources: price lists supplied by the Vilnius University and Vilnius College
3.3.5. Investments into renovation of student dormitories
This part analyses the investment already made during the past few years into the renovation of
student dormitories. It was a somewhat complicated task to do, as there was no single data
source from which the consultancy team could obtain reliable statistics. This is because of
several sources of funding for dormitories maintenance (operation and management costs) and
repairs (reconstruction). These needs are financed from the following sources:
• rent paid by the students, collected and spent by the dormitory operators (higher education
institutions, or, in few cases, by public companies managing the dormitories under a trust
agreement (for example Public Company Vilniaus universiteto būstas);
• transfers made or invoices paid on behalf of the dormitory manager by the higher education
institutions, whose funding originate either i) from the state budgetary annual transfers
allocated individually to the institutions for all their functional needs (the size of the transfer
is calculated in accordance with a methodology, approved by the Ministry of Finance) or ii)
funds directly raised by the higher education institutions, for example, for tuition). The share
of these funds subsequently reallocated to the dormitory maintenance or reconstruction costs
is determined by the higher education institutions themselves and can be obtained only
through direct contact;
• allocations of the State Investment Programme (SIP), which are planned and disbursed for
capital investments (construction, renovation or modernization) to specifically designated
objects (students dormitories).
This variety of funding sources can be illustrated by an example of the Vilnius University. The
Vilnius University operates a total of 21 student dormitory buildings, of which 18 are managed
under an agreement of trust by a public company Vilniaus universiteto būstas.
Table 7. Investments made for renovation of student dormitories operated by a public company
Vilniaus universiteto būstas (in LTL)*
No Investment sources 2006 2007 2008 2009
Part of rent collected and allocated for
(a) 2,000,000 2,000,000 2,000,000 1,184,000
repair/ reconstruction
41
No Investment sources 2006 2007 2008 2009
Invoices for reconstruction works paid
(b) 1,997,314 1,660,547 2,560,493 1,470,372
by the Vilnius University
(c1) Allocations from Privatization Fund 0 447,000 1,139,000 0
Allocations from the State Investment
(c2) 1,729,000 1,123,000 1,528,000 1,976,000
Programme
*– exclusive of three dormitories directly managed by the Vilnius University (more than LTL 2 million investments
made for operational and reconstruction during 2006–2008).
Source: data supplied by a public company Vilniaus universiteto būstas ((a) and (b)) and the Ministry of Finance
((c1)-(c2)).
One stream of investment made for renovations of dormitories was generated by the Programme
for Renovation of Student Dormitories of Higher Education Institutions67. Its main aim was to
renovate student dormitories and to bring them into compliance with essential requirements for
construction, increase energy efficiency and improve living conditions in the buildings. The
programme was pursuing the following objectives: 1) to reconstruct constructions and
engineering systems of dormitories; 2) to modernize energy system of buildings; 3) to reduce
operating costs and to ensure effective use of public funds, and 14 measures, namely, 1)
preparation of technical documentation; 2) overhaul of heating points; 3) reconstruction of
heating supply circuits; 4) repairing and insulation of the roofs; 5) change of the windows; 6)
replacement of the exterior doors; 7) repairing and insulation of exterior walls; 8) repairing of
existing heating systems, installation of new heating systems; 9) repairs of hot, cold and
circulation of water supply and wastewater systems; 10) repairs of air supply and removal
systems; 11) repairs of interior; 12) repairs of power installation and illumination systems; 13)
repairs of bathrooms and toilets; 14) replacement of furniture. An ex-ante assessment estimated
a total of LTL 44 million of investments during 2006–2009, of which LTL 40 million to be
drawn from the state budget and state investment programme and LTL 4 million were expected
to be invested from the higher education institutions “own” funds.
Investments actually made in the framework of implementation of the Programme for

Renovation of Student Dormitories of Higher Education Institutions (which correspond to the
investment source (c2) in the Table 5 above) during 2006–2009 totalled LTL 40 million, of
which LTL 25 million were invested into university dormitories and LTL 15 million were spent
on college dormitories. In addition about LTL 10.5 million of reconstruction works were
financed by transfers from Privatization Fund of Lithuania in 2007–2008, most likely to make
up the difference of forecasted and actual renovation costs during the period of construction
(prices) boom in Lithuania. It is important to note, that, according to the Ministry of Finance, the
allocations set aside for reconstruction of dormitories in the State Investment Programme in
2010 concern only completion of reconstruction works from previous years. The breakdown of
investment financed through State Investment Programme since 2000 and by individual higher
education institutions is presented in the Annex 4.
Experience shows that renovated dormitories save about 30% of heating, and heating costs
could be reduced by 50%. Thus, for instance, in 2003–2004 three dormitories of Vilnius
Pedagogical University were renovated. Before renovation, heating costs comprised LTL 3/m²,
while after renovation they stood at approximately LTL 1.5/m², meaning that LTL 1.5/m² is
saved during the heating season. Renovation costs were LTL 148–150 per 1 m². According to
the calculations made, these investments should pay back in 14 years.
67
Resolution of the Government of the Republic of Lithuania No 843 of 1 September 2006 on the Approval of the
Programme for the Renovation of Student Dormitories of Higher Education Institutions (Official Gazette No 94-
3699, 2006).
42
3.3.6. Other buildings under the jurisdiction of the Ministry of Education and Science
As mentioned above, the Ministry of Education and Science of the Republic of Lithuania
requested the consultants to assess eligibility of the following categories of buildings under its
own jurisdiction for application of JESSICA instruments, i.e. (a) educational and laboratory
buildings of state universities and state research institutions, (b) educational buildings and
buildings of practical training of state and municipal vocational training institutions, and (c)
buildings of general education schools and buildings of preschools.
All these categories are public buildings. However, the Ministry provided only the data about
state vocational education and training institutions. A total and heated area of buildings
managed by subsidiary bodies of the Ministry of Education and Science accordingly amount
684,423.71 m2 and 467,772.21 m2.
It also should be noted that part of these buildings are already eligible for subsidies for
investment into their energy efficiency measures (Measure No 3.4 titled “Renovation of the
Public Buildings on the National Level) under the Cohesion Promotion Operational Programme.
It allocated LTL 700 million and envisaged that 94 buildings will be renovated in health care
and education and science institutions.
3.4. Assessment of the amount of funds needed and their suggested distribution
among various tasks (dormitories, other public buildings, etc.), including
calculations of potential energy and financial savings
This chapter summarizes the results of calculations made in order to measure the magnitude of
the renovation problem and primarily targets student dormitories of three types, namely those of
a) universities, b) colleges and c) vocational education and training institutions. These
calculations were made for two scenarios, namely, a) in order to implement only energy
efficiency measures (as defined in the applicable EU regulations) or b) to undertake complex
renovations (beyond energy efficiency to tackle also the problem of improvement of welfare in
the buildings and around them). Also two investments financing alternatives were evaluated: a)
with 15% state support and b) without state support. Summarised calculations are presented in
Annex 7.
The background data for these calculations were generated by the survey, which the consultants
made with the universities, colleges and vocational education and training institutions about the
state of play of their dormitory stock and improvements needed. Ministry of Education and
Science has greatly facilitated the process of data collection, and the research team is very
grateful to them for their kind assistance. The contents of a standard questionnaire used for the
purposes of this study is attached in Annex 2 to this study, while the answers from all education
institutions surveyed are attached in the electronic form (in CD-ROM).
According to the data received, most of the dormitories require modernisation of roofs and
balconies, replacement of windows, insulation of walls, modernisation of heating stations,
replacement of electric installation and pipes, renovation of water closets and kitchens.
Dormitory surroundings should be also managed – car parking lots should be expanded, sport
and leisure fields developed, etc.
These data together with the data related to energy savings in the renovated dormitories and
construction costs (as extracted from the collection of information programmes SĄMATA
43
(supplied by Sistela UAB)) served as a basis for calculations made to identify demand for funds
for renovation of dormitories, establish possible energy savings and investment payback. The
payback period was calculated with an assumption that the loan will be paid back only from
energy savings, and the dormitory rent price for students will not increase.
categories in the universities - managed dormitories (complex renovation)
Total amount of
Price per unit of funds required
Unit of Total amount
Work to be carried out measurement (in to carried out
measurement of works
LTL) the work (in
LTL)
Replacement of windows m² 8,729.36 518.46 4,525,823.99
Roofing reconstruction and

m² 38,135.30 192.78 7,351,723.13
additional insulation
Repair and insulation of

km 2.40 1,620,677.20 3,889,625.28
outdoor heating circuits
Modernisation of heating
set 13.00 35,618.95 463,046.35
station
Insulation of facade walls m² 182,324.07 188.64 34,393,612.56
Rearrangement of heating and

m 105,456.00 95.00 10,018,320.00
hot water systems
Replacement of cold water

m 38,929.00 75.00 2,919,675.00
system
Replacement of sewage pipes m 36,336.00 300.00 10,900,800.00
Replacement of electrical
installations and lighting m 581,585.36 15.00 8,723,780.40
system
Repair of toilets and showers m² 19,914.93 736.72 14,671,727.23
Repair of kitchens m² 12,409.55 741.16 9,197,462.08
Replacement of lifts pcs 28.00 100,000.00 2,800,000.00
Repair of balconies m² 9,791.20 35.00 342,692.00
Total: 110,198,288.02
The total amount required to carry out complex renovation works in universities - managed
dormitories comprises LTL 110,198,288.02.
If only energy efficiency measures are implemented, the demand for investments will be as
presented in the table below.
Table 9. Summary of renovation works to be carried out and their breakdown into categories in
the universities - managed dormitories (only energy efficiency related renovation)
44
Total amount of
LTL) the work (in
LTL)

m² 38,135.30 192.78 7,351,723.13

km 2.40 1,620,677.20 3,889,625.28
set 13.00 35,618.95 463,046.35
station

m 105,456.00 95.00 10,018,320.00
hot water systems
Total: 60,642,151.31
The total amount required to carry out only energy efficiency measures in universities -
managed dormitories comprises LTL 60,642,151.31.
categories in the colleges - managed dormitories (complex renovation)
Total amount of
LTL) the work (in
LTL)

m² 26,772.00 192.78 5,161,106.16
set 24.00 35,618.95 854,854.80
station
Insulation of facade walls m2 84,439.45 188.64 15,928,657.85

m 39,904.60 95.00 3,790,937.00
hot water systems

m 12,835.30 75.00 962,647.50
system
system
45
Total amount of
LTL) the work (in
LTL)
Replacement of lifts pcs 11.00 100,000.00 1,100,000.00
Total: 45,876,777.18
The total amount required to carry out complex renovation works in colleges - managed
in the colleges - managed dormitories (only energy efficiency related renovation)
Total amount of
LTL) the work (in
LTL)

m² 26,772.00 192.78 5,161,106.16
set 24.00 35,618.95 854,854.80
station

m 39,904.60 95.00 3,790,937.00
hot water systems
Total: 28,461,198.54
The total amount required to carry out only energy efficiency measures in colleges - managed
The grand total required for complex renovation of all dormitories, managed by higher
education institutions (universities and colleges), is LTL 156,075,065.20, while implementation
of only energy efficiency measures – LTL 89,103,349.85.
The total area of higher education institutions - managed dormitories to be renovated comprises
462.6 thousand m², of which universities - managed dormitories make up 315.6 thousand m² and
colleges - managed dormitories 147 thousand m². Investments for complex renovation into 1 m²
of a dormitory would amount to LTL 349.17 for universities and LTL 312.09 for colleges. If
only energy efficiency measures are implemented, the investments into 1 m2 will amount to
LTL 192.15 in case of universities and LTL 193.61 in case of colleges.
46
The basic assumptions and calculations of possible energy and financial savings are presented
further.
Standard energy demand for heating, ventilation and hot water is approx. 84,000 MWh/year. In
order to cover energy costs universities spend over LTL 8 million, while colleges approx. LTL 3
million per year.
According to the data provided, during the last heating season dormitories consumed 49,267.19
MWh of energy (of which universities consumed 31,292.3 MWh and colleges 17,974.89 MWh).
The calculations of possible energy savings are based on the results received by comparing
energy savings in modernised dormitories. According to the monitoring of these dormitories
carried out when drafting a Programme for the Renovation of Student Dormitories of Higher
Education Institutions, the renovation of dormitories saves approx. 30% of heating energy
consumption and up to 50% of heating costs. Thus, for instance, in 2003–2004 three dormitories
of Vilnius Pedagogical University, located in Studentų g., Vilnius, were renovated. Before
renovation, the average price for heating was LTL 3.0/1 m², while after renovation, approx. LTL
1.5/ m². Hence, during the heating season approx. LTL 1.5/ m² is saved. The investments into 1
m² amounted to LTL 148–150. The calculations show that the investments into the said
dormitories should pay back in 14 years. Tables 12 and 13 present the data on the difference
between heating costs in three dormitories of Vilnius Gediminas Technical University, which
had their windows replaced, and heating costs in a dormitory with old and unsealed windows.
Table 12. Average heating price in dormitories (LTL/ m² per month)

Savings (in
Dormitory, address 2004 2005
LTL)
No 1, Saul÷tekio al. 25 1.52 1.22 0.30
No 3, Saul÷tekio al. 16 2.59 1.66 0.93
No 4, Saul÷tekio al. 18 2.29 1.66 0.63
N0 5, Saul÷tekio al. 19 (windows not replaced) 1.99 2.04 -0.05
Table 13. Heating costs in dormitories

2004 2005 Savings (in
Dormitory, address
MWh LTL MWh LTL LTL)
No 1, Saul÷tekio al. 25 865.48 95,873.55 695.52 77,046.23 18,827.32
No 3, Saul÷tekio al. 16 948.52 105,072.30 608.11 67,363.39 37,708.91
No 4, Saul÷tekio al. 18 843.99 93,492.99 611.79 67,771.04 25,721.95
No 5, Saul÷tekio al. 19
1,062.02 117,645.27 1,088.39 120,566.40 -2,921.13
(windows not replaced)
The calculations of financial savings are based on the presumption that the price of electric
energy is 35 ct/kWh, of heating energy – 21 ct/kWh, of hot water LTL – 16.15/m³.
After the modernisation and the implementation of energy efficiency measure (insulation of
walls and roofs, replacement of piping and windows), the energy consumption will be reduced
by 30% on average. In this way, 14,780 MWh of energy or LTL 3.1 million will be saved per
year. The reduction in energy consumption in buildings will save another 10,420 MWh of
energy or LTL 2.2 million. Hence, after renovation, the standard energy consumption will be
58,800 MWh and the savings will amount to 25,200 MWh or LTL 5.3 million per year (where
price of heating energy is 21 ct/kWh). Accordingly savings for 1 m2 will comprise LTL 11.46.
47
On the basis of the above estimates, the investments for complex modernisation without state
support will pay back in 30.5 years in case of universities and 27.2 years in case of colleges,
while with 15% of sate support accordingly in 28 and 24.7 years. If only energy efficiency
measures are implemented, the investments without state support will pay back in 16.8 years in
case of universities and 16.9 years in case of colleges, while with 15% of sate support
accordingly in 14.3 and 14.4 years.
The total area of vocational education and training institutions - managed dormitories to be
renovated is 262 thousand m². The energy consumption in the last season was 23,012.99 MWh.
categories in the vocational and training education institutions - managed dormitories (complex
renovation)
Total amount of
LTL) the work (in
LTL)

m² 46,356.06 192.78 8,936,521.25

km 4.13 1,620,677.20 6,693,396.84
set 52.00 35,618.95 1,852,185.40
station

m 71,287.00 200.00 14,257,400.00
hot water systems

m 28,708.41 120.00 3,445,009.20
system
Replacement of sewage pipes m 24,324.08 120.00 2,918,889.60
system
Replacement of lifts pcs 4.00 100,000.00 400,000.00
Total: 82,588,693.82
The total amount of funds required to carry out complex renovation works in vocational and
training education institutions - managed dormitories is LTL 82,588,693.82. Investments into 1
m² amount to LTL 315.22. The payback period without state support will be 27.5 years, while
48
with 15% of sate support 24.5 years.
in the vocational and training education institutions - managed dormitories (only energy
efficiency related renovation)
Total amount of
LTL) the work (in
LTL)

m² 46,356.06 192.78 8,936,521.25

km 4.13 1,620,677.20 6,693,396.84
set 52.00 35,618.95 1,852,185.40
station

m 71,287.00 200.00 14,257,400.00
hot water systems
Total: 60,750,836.12
The total amount of funds required to carry out only energy efficiency measures in vocational
and training education institutions - managed dormitories is LTL 60,750,836.12. Investments
into 1 m² amount to LTL 231.87. The payback period without state support will be 20.2 years,
while with 15% of sate support 17.2 years.
The total amount required for the renovation of dormitories, managed by universities, colleges
and vocational education and training institutions is presented in Table 16.
Table 16. Total funds needed for complex renovation and energy efficiency measures
Funds needed for Funds needed only Funds needed for
Institution complex renovation for energy efficiency 15% state support
(in LTL) measures (in LTL) (in LTL)
Universities 110,198,288.02 60,642,151.31 9,096,322.70
Colleges 45,876,777.18 28,461,198.54 4,269,179.78
Vocational and training

82,588,694.00 60,750,835.00 9,112,625.25
education institutions
Total: 238,663,759.20 149,854,184.85 22,478,127.73
According to the data provided by the Ministry of Education and Science, a total area of other
buildings (excluding students’ dormitories), managed by vocational education and training
49
institutions, amounts 684.4 thousand m2. Taking in to account the fact that characteristics and
condition of other buildings is similar to the dormitories and on the basis of dormitories
investments into 1 m2 for energy efficiency measures (LTL 231.87), it can be argued that the
total amount of funds required to carry out such works comprises LTL 158,697,325.6.
It also should be mentioned, that one of the key energy saving sources could be the construction
of co-generation power plants in the area of student dormitories. It would reduce the payback
period of investments by 1.5 times at least. Such results are possible as the cost of electric
energy produced in a co-generation power plan is 12.4 ct/kWh, and of heating 10.8 ct/kWh. The
calculations are based on the presumption that one co-generation power plant, the capacity of
which is 100 kW of output and 80 kW of electric power per hour, is built for a complex of five
dormitories with the area of 2,000 m² each. Such co-generation power plant, including
installation works, costs LTL 480,000. However, this option would be possible only if the
current district heating supply does not meet the established parameters (eg. energy losses in a
long range circuit) and most likely would be opposed by district heating companies. It therefore
would require further investigation.
3.5. Allocation of risk and return between private and public capital, and between
stakeholders
The modernisation of dormitories of education institutions should be financed on the basis of

the reduction in energy consumption so that savings could help to pay back loans irrespective
of the borrower (the education institution, the authorised institution organising modernisation
works or the contractor).
The credit period should not be shorter than the payback period of the measures implemented.
Similar to the programme for the modernisation of multi-apartment buildings, soft loans with
the fixed annual interest rate of 3% should be granted.
Another possible source of income for loan servicing is rent paid by students and pupils who
live in dormitories. However, it is risky – the increase in the rent for dormitory accommodation
may result in the reduction of the number of students living in dormitories as the education
institution will not be able to compete with the prices offered by the private sector.
If the rent is left unchanged, some of the funds received could be used for loan servicing since
a modernised dormitory requires fewer resources for the running repair during the first 5 years.
Irrespective of the borrower, the loan payback should be ensured by:
1. The services paid by dormitory residents;
2. The energy savings and smaller demand for funds to pay for energy. Some of the savings
(approx. 75–80%) should be used for loan servicing.
If, according to the calculations, the savings amount to LTL 11.46/m², LTL 8.6–9.2/m2 could
be directed to loan servicing. The remaining amount required for loan servicing could comprise
of the income received for the services provided to inhabitants.
If funds are borrowed from banks, one of the main issues will be risk sharing and credit
security measures. The risks should be assumed by the State as there are no legal possibilities
to mortgage the buildings to be modernised. Furthermore, a list of priority buildings to be
modernised should be drawn up in order to prioritise buildings which consume the most energy
and the state of which is extremely poor.
50
A loan should be granted only if the investment project provides for the implementation of
energy-efficiency measures along with other modernisation measures, which ensure at least
20% energy savings per year. Two loan schemes are possible:
1. Similar to the case of multi-apartment buildings, loans are granted by the Holding Fund via
banks operating in Lithuania;
2. Loans are granted by the institution authorised by the Holding Fund.
To avoid new selection criteria or requirements, the coordination of which is very time-
consuming, it is proposed to leave the same eligibility and selection criteria as in the case of
multi-apartment buildings.
Further, given the financing situation of education institutions, it is also proposed not to request
the co-financing of at least 5% of the project value, if it is an education institution that borrows.
In this case, 100% of the project value should be financed. In all other cases, 95% of the project
value would be financed. A loan with the fixed annual interest rate of 3% would be granted for a
period of up to 20 years. 15% state support could be provided to the implemented projects under
the same conditions as it is provided to multi-apartment buildings.
51
4. TARGET BENEFICIARIES & FINANCING SCHEMES
The terms of references for this study require analysing the possibility to apply the JESSICA
instruments for renovation of student dormitories and other buildings under the jurisdiction of
the Ministry of Education and Science for purposes of increasing energy performance of these
buildings. However, during the interviews with the stakeholders and from the data collected for
the purposes of this study it appeared that improved energy performance is no longer the single
biggest issue of renovation of student dormitories. This is so because some of the energy-
saving-related investments have been already made. In addition to the remaining energy
efficiency measures to be applied, internal and external modernisation measures (which are not
directly related to energy efficiency) for student dormitories are of equal and acute importance,
namely, reconstruction of cold water supply pipelines, bathrooms, kitchens, renewal of
furniture and reconstruction of room space in the interior, as well as renewal of car parking
areas and other facilities in the exterior. In short, these additional necessary modernization
measures would increase attractiveness of dormitories and could be called welfare measures.
As noted above, it is very doubtful whether and to which extend measures, which are not
designated as energy efficiency measures could be financed by the JESSICA instrument.68
Before embarking to five possible financial schemes, it is important to analyze the effect of
lending operation to public debt and deficit. Our stakeholder analysis already identified a
strong preference of the Ministry of Finance to a scheme which would have as minimal
negative effect on public debt and deficit as possible.
4.1. The effect of lending by the Urban Development Fund on the public sector
debt and deficit69
According to the applicable Lithuanian legislation and the explanation of the Ministry of
Education and Science, currently higher education institutions cannot borrow at all as it is
against Article 10.3 of the Law on Budgeting, which lays down “Budget appropriation managers
and budgetary institutions within their remit can neither borrow on their behalf nor assume any
debt liabilities (according to Article 33.1(6) of this Law).”
Higher education institutions will be subject to the provision regarding borrowing limits only
after they become public companies (before the end of 2011, at the latest). Only then they will
automatically become subject to Article 83.4 of the Law on Science and Studies, which lays
down the following “Public higher education institutions shall have the right to borrow, that is to
conclude loan agreements, lease agreements and other binding debt instruments, within the
borrowing limit established to all public higher education institutions by the Law on the
Approval of Financial Indicators of the State Budget and Municipal Budgets of the respective
year. The Ministry of Education and Science shall distribute this borrowing limit to public
higher education institutions. Public higher education institutions shall report on the debt
liabilities assumed to the Ministry of Education and Science in accordance with the procedure
68
Measures not related to energy-efficiency could be financed, if a decision on the use of the resources of the
JESSICA Holding Fund exceeding the minimum national co-financing rate is adopted. Given the fact that the
practice of the JESSICA use in the European Union is limited, to our best knowledge, it would be expedient to get a
clarification of the European Commission regarding the opportunities to finance measures not related to the energy
efficiency in residential buildings.
69
This section was drafted on the basis of the explanations provided by the experts of the Ministry of Education
and Science and the State Treasury Department of the Ministry of Finance.
52
establish by it. A public higher education institution shall not mortgage more than 20 per cent of
the tangible assets owned by it under the title of ownership in order to ensure the compliance
with the debt liabilities. The mortgage of real estate shall be approved by the Government or the
authority authorised by the Government in accordance with the procedure established by the
Government.”
Higher education institutions are not subject to provisions of Article 83.4 of the Law on Science
and Studies and other provisions on property management, use and disposal laid down in
Section 8 as long as they are budgetary establishments.
Thus, during the implementation of the higher education reform but not later than the end of
2011, higher education institutions will be reorganised into public companies and, according to
the applicable legislation, be able to borrow, even though the loan size will be limited.
The applicable Procedure of the Assigning of Economic Entities to Institutional Sectors and
Sub-Sectors (approved by Order No DĮ-172 of the Director General of the Department of
Statistics under the Government of the Republic of Lithuania of 2 August 2005) assigns higher
education institutions (universities) to the public sector (as they are budgetary establishments).
The economic entity rather than the activity is assigned to the sector. Higher education
institutions are likely to remain in the public sector even after being reorganised into public
companies, and their borrowing together with the expenditure experienced during the loan use
should be added to the debt of the public sector and to the deficit, respectively.
The establishment of the JESSICA fund has increased the debt of the public sector and the fiscal
deficit respectively only by the amount of national co-financing. It was one-off deficit-
increasing action calculated during the transfer of the funds borrowed for co-financing to the
JESSICA holding fund. Further borrowing from the JESSICA fund for the implementation of
the goals set by the fund will increase the debt of the public sector and the deficit respectively,
depending on the borrower (i.e. if the borrower is a public sector entity, the deficit and the debt
will grow). However, there are no methodological explanations yet in this respect (for JESSICA
instruments). Commercial loans (expenditure experienced during their use) to public sector
entities should be added to the debt/deficit of the public sector (state higher education
institutions).
Modernisation works could be financed under a scheme similar to the one used for the
programme for the modernisation of multi-apartment buildings financed by the JESSICA funds.
Hence, a soft loan with the fixed annual interest rate of 3% would be granted together with 15-
per cent state support. In such a case, the total amount of the state support required for the
implementation of energy-efficiency measures in all dormitories would aggregate
LTL 22,478,127.73. With a help of the state support and without it, the investments (requiring
loan funds) into 1 m² (where the energy savings are LTL 11.46/1 m²) would be as follows:
Table 17. Full modernisation of dormitories

Payback
Payback
Funds period
1 m² (in state
LTL) support (in
years)
years)
Universities 349.17 28.82 320.35 4.83 28.0 30.5
Colleges 312.09 29.04 283.04 4.26 24.7 27.2
53
Payback
Payback
Funds period
1 m² (in state
LTL) support (in
years)
years)
Vocational
education and
315.22 34.78 280.44 4.22 24.5 27.5
training
institutions
Table 18. Implementation of energy efficiency measures only

Payback
Payback
Funds period
1 m² (in state
LTL) support (in
years)
years)
Universities 192.15 28.82 163.33 2.46 14.3 16.8
Colleges 193.61 29.04 164.57 2.48 14.4 16.9
Vocational
education and
231.87 34.78 197.09 2.97 17.2 20.2
training
institutions
Annex 5 includes calculations showing how a fee for accommodation in a dormitory could
change so that the investments pay back in 7 years. The calculations have been made on the
basis of the data of particular dormitories.
As noted above in Chapter 3.4, the payback of investments could be increased by construction
of cogeneration power plants, solar batteries or biofuel boilers. This would increase the demand
for investments by approx. LTL 164/m², however, the payback of investments would decrease
by approximately 1.5 times.
Thus this study analyzes five possible financing schemes, of which the first three would be
possible for application of energy efficiency measures from the JESSICA instrument. The last
two schemes, namely, the fourth and the fifth one could be used for more ambitious (complex)
modernization which in addition to energy efficiency measures would also target welfare
measures.
The following parts of the study describe the main characteristics of the schemes, their
advantages and disadvantages as well as existing legal context and/or restrictions.
4.2. Loan by the dormitory manager scheme
In this scheme the loan would be taken out by dormitory manager, who would carry out a
renovation project on its own. As noted above, higher education establishments would be able to
borrow (albeit still subject to capping) only when they change their current legal status of
budgetary institutions to public companies. Municipalities could borrow for dormitories of
54
general education schools. Ministry of Education and Science of the Republic of Lithuania is
not permitted to borrow money or to undertake any other debenture on its own behalf. It is
provided by Article 10.3 of the Law on Budgeting of the Republic of Lithuania70. By derogation
of this rule, according to Article 33.1.6 of the Law on Budgeting, the Government of the
Republic of Lithuania or its authorized institution may entitle to borrow for the implementation
of the projects financed by EU funds. However, to the best of our knowledge such right is
granted neither to the Ministry of Education and Science nor to universities. Thus, the Ministry
of Education and Science of the Republic of Lithuania is not eligible to borrow money directly
for the modernisation of student dormitories and other buildings under the jurisdiction of
Ministry Education and Science of the Republic of Lithuania (vocational training institutions,
colleges, etc.).
As it was noted in this study, the majority of student dormitories are possessed by universities.
However, the abovementioned restriction to borrow money and undertake any other debenture
on its own behalf is also applicable to the universities.
It should be noted that different provisions on the borrowing by universities would be applied as
of the change of a legal form of the universities from current budgetary institutions to public
companies (Lith. viešoji įstaiga). After such a change, Article 83.4 of the Law on Science and
Studies of the Republic of Lithuania 71 providing possibility for universities to borrow money
would be applicable. However, such right for all universities collectively would be restricted by
the borrowing limit set out in the respective Law on the Approval of State Budget and
Municipal Budgets (prior to setting of such limit, borrowing is not permitted). Individual
borrowing limit for each university should be allocated by the Ministry of Education and
Science. Such transformation should take place by 31 December 2011 at the latest. To the best
of our knowledge, no transformation has been completed yet. As it was mentioned, prior such
transformation, universities are not eligible to borrow money for any purpose, including the
modernisation of the student dormitories.
This scheme seemed to be attractive to the higher education institutions interviewed. They also
seem to be comfortable with the amounts of own co-financing to be injected to the renovation
project. However, it is clear that, as indicated above, the ambition of renovation would be
limited to energy efficiency measures only. Commercial loans for complex renovation would be
difficult to achieve, not only because they would count towards public sector debt and deficit,
but also because property managed under a trust agreement from the state can not be mortgaged.
Since the borrowing for energy efficiency would be undertaken by a unit of the public sector
from an institution (UDF) which does not fall into a category of public sector units, even the
JESSICA funds would count towards the public sector debt and deficit in such a scheme.
In this scheme, the borrowing limits to education institutions managing dormitories should be
established in the amounts which would enable the renovation to be carried out. Conditions of
lending could be similar to those applied for multi-apartment housing, and loans should be
granted without mortgage. By virtue of Article 80.2 of the Law on Science and Studies after the
changes of legal form of the universities the trust right to the buildings shall be transferred to the
universities for the period not exceeding 20 years. It should be considered for the calculation of
the term of the loan. The payback time for complex modernization of the student dormitories as
calculated in this study clearly exceeds this term.
70
Law of the Republic of Lithuania on Budget Structure No IX-1647 of 24 June 2003 (adopted by the Seimas of
the Republic of Lithuania (Official Gazette No 4-47, 2003)).
71
Law of the Republic of Lithuania on Science and Studies No XI-242 of 30 April 2009 (adopted by the Seimas of
the Republic of Lithuania (Official Gazette No 54-2140, 2009)).
55
4.3. Loan by the designated state owned limited liability legal entity
Considering the fact that the direct borrowing by the Ministry of Education and Science of the
Republic of Lithuania and universities is restricted, establishment of state owned limited
liability legal entity or an attribution of such function to an existing entity with the view of its
responsibility for renovation of student dormitories should be analyzed. Under this scheme, the
participating education institutions would enter into agreement with the designated entity and
would undertake commitments, which would guarantee the paying back of the loan.72 As well as
the scheme above, this arrangement could tackle the energy efficiency related renovation
measures, and in order to bring the benefits of the economy of scale (up to 20 percent of
investment savings) the participation of student dormitories in this centralized approach would
have to be total or near total.
In such a case, borrowing limits would not be applicable to such limited liability legal entity.
However, further financing may be complicated. Firstly, direct lending to Ministry of Education
and Science of the Republic of Lithuania and universities is restricted as described in the
scheme above. Secondly, financing of renovation by such entity in exchange for energy savings
contains regulatory problems as described bellow.
A tender procedure should be involved. The limited liability entity would be deemed as the
private entity and by virtue of Article 6 of the Law on Concessions73 granting special right to
private entity as a general rule, requires tender.
However, the requirement of tender procedure would not be applicable to AB Turto bankas
since such right is granted by Article 161.4 of the Law on Possession, Use and Disposal of State
and Municipal Property74. Moreover, since AB Turto bankas is a public limited liability
company, by virtue of Rules on Attribution of the Entities to Institutional Sectors and
Subsectors75 the debt of limited liability companies owned by the state does not fall within
public debt. Considering special legal status of AB Turto bankas (the Articles of Association are
approved by law) it is recommended to acquire position of the Ministry of Finance of the
Republic of Lithuania on this issue.
By virtue of Items 13, 14 and 15 of the Rules on Preparation and Implementation of Public
Private Partnership Projects76, the major risks should be undertaken by such limited liability
company, otherwise such financing could be construed as the financial lease and it would be
included in public debt and deficit. The risk transfer is deemed as the transfer of major risks if
(i) the construction risks and (ii) at least one of suitability or demand risks are undertaken.
72
The Law on Budgetary Institutions provides for, that the managers of the institutions acquiring budget funds are
obliged to approve expenditure not exceeding approved budget funds. Ministry of Finance thinks that the problem
of long term commitments related to the pay back of the loan would have to be solved by the decision of the
Government of Lithuania for individual institutions or to a set of education institutions, which would enable them
to engage into the long term schemes. Law of the Republic of Lithuania on Budgetary Institutions No I-1113 of 5
December 1995 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 104-2322, 1995)), with
later amendments.
73
Law of the Republic of Lithuania on Concessions No IX-1647 of 24 June 2003 (adopted by the Seimas of the
Republic of Lithuania (Official Gazette No 70-3163, 2003)).
74
Law of the Republic of Lithuania on Possession, Use and Disposal of State and Municipal Property No VIII-729
of 12 May 1998 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 54-1492, 1998)), with
later amendments.
75
Rules on Attribution of the Entities to Institutional Sectors and Subsectors (adopted by Order No DĮ-172 of the
Chief of Department of Statistics under the Government of the Republic of Lithuania of 2 August 2005).
76
Rules on Preparation and Implementation of Public Private Partnership Projects (adopted by Decision No 1480 of
the Government of the Republic of Lithuania of 11 November 2009 (Official Gazette No 137-5998, 2009)).
56
4.4. ESCO (Energy Service Company) scheme
According to the ESCO (energy service company) scheme, energy-efficiency measures would
be implemented in dormitories by an energy service company (or any third party), which would
return the loan using savings and taking a certain margin. With a help of energy savings after the
modernisation, the investments would pay back within the period specified in the calculations.
Furthermore, an energy service company would have to produce less energy thus reducing fuel
expenses, and the renovated heating circuits and heating systems would cut heating losses.
This scheme would not increase the public debt as the energy service company would finance
the amount necessary for the project co-financing. However, Lithuanian district heating utilities
are not too interested in implementing energy-efficiency measures in student dormitories and
their renovation since the Lithuanian District heating Association has not replies to the
consultants’ request. The legal analysis below reveals that the involvement of third parties as
possible ESCO companies is legally possible but would be too complicated and would receive
too little interest.77
Energy supply licence is not required for an ESCO company. Thus service of implementation of
energy saving measures may be provided by either the supplier of heating energy or any third
party. According to Article 30.1 of the Law on Heating Infrastructure of the Republic of
Lithuania 78 provision of energy supply services requires license. However, Article 2.39 of the
Law on Heating Infrastructure of the Republic of Lithuania defines energy supply service as the
delivery of centrally produced heating energy and sale for the customer. Thus, the services of
ESCO company would not fall within this definition.
In case ESCO company would also be supplier of the heating energy, additional regulatory
requirements would be applied. By virtue of Article 30.13.4 of the Law on Heating
Infrastructure of the Republic of Lithuania, heating energy supply company (holder of the
licence to supply heating energy) is obliged to implement separate accounting of costs of energy
supply.
In such model energy should be supplied from the supplier to the manager of the building as it is
in the present situation. However, the savings would be calculated and bill for the savings would
be served by ESCO company to the manager of the buildings on the contractual basis. Since the
actual savings of the energy also depend on the rational use of the energy, ESCO company may
be entitled to appoint a company responsible for the proper exploitation of heating facilities (for
such company attestation is required).
The provision of the right to renovate public buildings for ESCO company generally depending
on conditions may fall within the definition of concession. Thus, it is likely that the Law on
Concessions would be applicable to this scheme. In such case, the requirements for the
concession scheme and financing methods described bellow are also applicable.
4.5. Concession scheme
77
Interview with City Service AB of 10 December 2009. City Service AB is implementing a partial ESCO scheme
with the Vilnius City Municipality. Its description is provided in Annex 6 of this study.
78
Law of the Republic of Lithuania on Heating Infrastructure No IX-1565 of 20 May 2003 (adopted by the Seimas
of the Republic of Lithuania (Official Gazette No 51-2254, 2003)), with later amendments.
57
In this scheme, the beneficiary of the JESSICA instrument (for energy efficiency measures) and
further commercial loan (if own resources are not invested) to achieve complex modernization
of dormitories is a concessionaire. The concessionaire in accordance with the terms of a
concession agreement would acquire the right to manage the dormitories in all or certain
functions. This transfer of management rights for the period of a concession agreement is a key
difference from the ESCO model. A concessionaire would be entitled to an agreed share of
energy savings achieved. Crucially, unlike in the previous three schemes, the concession
agreement could actually demand from a concessionaire an achievement of certain agreed level
of energy savings during an operation of renovated dormitories. Interviews with potential
concessionaires made during the drafting of this study show that they would be ready to
participate in the tendering of this scheme. Calculations of the investment needed, payback
times and other indicators on the basis of three dormitory buildings of the Vilnius University are
presented in the Annex 5 of this study.
The concession under this scheme falls within the definition of the concession set forth in
Article 2.1 of the Law on Concessions. By virtue of Article 2.1 of the Law on Concessions, the
concession is defined as a permission of the granting institution under terms and conditions of
concession agreement granted to the concessionaire to pursue activities, inter alia, related to
renovation, construction, management and use of infrastructure objects, manage and use the
state property, if all risks or major part hereof are undertaken by the concessionaire and the
remuneration for the concessionaire consists only of granting such right and incomes of such
activities and (if applicable) remuneration provided by granting institution.
Article 3.3 of the Law on Concessions provides that under the concession agreement the
possession of the assets owned by the state may be transferred to the concessionaire only for the
limited period of the concession.
The financing to the concessionaire could be channelled through one of the following ways,
namely (a) a loan from UDF, and in such case stake in the concessionaire could be held by
private investors and the state or one of them, or (b) by investing into the capital of the
concessionaire. UDF funds may be used by the way of equity investments. Depending on the
structure of financing and expression of interest of private entities to take part of the risk, the
concessionaire could be of a private capital, mixed capital or UDF capital.
It is important to note that a concessionaire should be chosen by public tender procedure laid
down in the Law on Concessions. Risk transfer rule as described in the second scheme above
also applicable for this scheme for calculation of public debt and deficit.
Article 5.5 of the Law on Concessions provides that prior to announcing the tender for the
concession, the granting institution must analyze the expedience and the benefit for the public
interests, including detailed analysis of concrete economic and social benefit for the society.
Article 281.1.1 sets forth the requirement of the approval from the Ministry of Finance of the
Republic of Lithuania for the financial terms and conditions of the concession.
4.6. Factoring scheme
A factoring scheme consists of two agreements, namely (a) an agreement between the Ministry
of Education and Science or an education institution and provider of modernisation services, and
(b) an agreement between factoring service provider and provider of modernisation services.
A higher education institution commissions a contractor to carry out renovations works and the
58
debt is factorised to the institution acting as a UDF (according to the legal analysis below, it can
be a bank). A higher education institution returns the loan to the UDF by using savings
(received with a help of energy-efficiency measures) and/or accommodation rent paid by
students (which was used for welfare improvement).
It has to be noted that this financing scheme contains certain legal risks as described bellow.
Factoring services on the regular basis may be provided only by financial institution. According
to the Law on Financial Institutions of the Republic of Lithuania provision of factoring services
falls within the definition of lending and is deemed to be financial service. For entities providing
financial services the requirements provided for by the Law on Financial Institutions and other
laws and regulations, including on risk management, concerning financial institutions are
applicable.
Provider of factoring services must be profit oriented legal entity (bank or other profit oriented
legal entity) as it is provided by Article 6.903 of the Civil Code of the Republic of Lithuania.
This scheme involves the risks that financing would be construed as lending and would be
included in public debt and deficit. Such conclusion is based on the presumption that in order
for this scheme to be operational the agreement for factoring services should be concluded prior
to provision of services. Typically by factoring the financing is provided for the supplier of
goods or services. However, in this scheme, it would be noticeable that financing is provided for
the Ministry of Education and Science or universities.
This scheme involves the risk of the bankruptcy of the provider of modernisation services.
Article 6.905.3 of the Civil Code of the Republic of Lithuania stipulates that in case of transfer
of future claim (it is defined as the claim prior the maturity day) it is recognized that the right of
claim passes to the provider of factoring services after the maturity. Under Article 10.7.3 of the
Law on Bankruptcy of Entities79, following the day as of the entry in force of the decision to
start bankruptcy proceedings of the entity, such entity is not permitted to execute any financial
obligations. Considering the fact that no case law concerning such situation exists, such
provisions may be interpreted that all claims the maturity of which commences after the
initiation of bankruptcy proceeding are not transferred to the provider of factoring services. This
could lead to the situation when the manager of the building has the obligation to pay to the
provider of modernisation services, notwithstanding the fact that the provider of factoring
services already paid to the provider of modernisation services. It may be recognized that
provider of factoring services only has the claim right to the bankrupt company.
The legal analysis of the laws and regulations concerning the disposal of the budget indicates
that the agreement on trade credit for the period exceeding term of approved budget may be
incompatible with mandatory provisions of the laws and regulations of the Republic of
Lithuania. Article 5.1.3 of the Law on Budgeting provides for that managers of the institutions
acquiring budget funds are obliged to set and approve programmes and estimates of the
managed budgetary institution and subsidiary institutions and subjects not exceeding approved
budget funds. As it was already mentioned, the Ministry of Education and Science of the
Republic of Lithuania as well as universities prior transformation are not eligible to borrow
money for the modernisation of the student dormitories and other buildings under the
jurisdiction of Ministry Education and Science of the Republic of Lithuania. Moreover, the Law
on Budgetary Institutions provides for that the managers of the institutions acquiring budget
funds are obliged to approve expenditure not exceeding approved budget funds. In the opinion
79
Law of the Republic of Lithuania on Bankruptcy of the Entities No IX-216 of 20 March 2001 (adopted by the
Seimas of the Republic of Lithuania (Official Gazette No 31-1010, 2001)), with later amendments.
59
of the Ministry of Finance, a solution to this problem could be as described in the second
scheme above (see footnote No 77).
Provider of factoring services must ensure that the borrowing does not exceed the authorized
capital. By virtue of Article 1 of the Law on Lending by Economic Entities to Natural and Legal
Persons, the ability of non-credit institution to provide financing to natural and legal persons is
limited by the amount of the authorized capital of the financing entity.
60
MAIN CONCLUSIONS AND RECOMMENDATIONS
1. The study demonstrated that it is possible to extend the current scope of the JESSICA
energy efficiency actions beyond traditional housing in order to include student dormitories
and other public buildings under the jurisdiction of the Ministry of Education and Science.
Extending the current scope would be the best way to start the renovation of dormitories as
soon as possible. There are no restrictions for student dormitories to benefit from JESSICA
instruments, and energy efficiency measures, financed through the loan schemes, can be
implemented. Other (public) buildings would in principle be eligible to benefit from the
JESSICA instrument as provisions of the appropriate EU legal acts do not establish
restrictions for modernisation of public buildings as such from the funds of the ERDF.
However, energy efficiency related renovation of these buildings through the loan schemes
(such as the JESSICA instrument) must be a) correctly established in the documents
regulating the use of EU financial assistance in Lithuania, and b) appropriately originate and
be channelled from the ERDF source. The possibility to finance other than energy efficiency
measures from JESSICA instrument in order to perform complex renovation of dormitories
could at best be marginal and even then would still need further clarification from the
European Commission.
2. However, successful use of the JESSICA mechanism for renovation of student dormitories
and other public buildings would significantly depend on the irreversible entrenchment of
the policy line by the Government, which should state that all public investments generating
return should be channelled only through the loan schemes. A loan based approach is
certainly worthwhile looking at in the future, and would be a proper thing to do for all
energy related (repayable) renovation measures for all buildings and not just for housing.
3. The study suggests that the currently existing institutional set up for multi-apartment
housing should be maintained also for student dormitories and other public buildings.
Financial institutions (banks) can serve the function of the Urban Development Fund (UDF)
as is the case for renovation of multi-apartment houses. The existing scheme will allow
starting the renovation of dormitories as soon as possible. The call for expression of interest
aiming to select financial intermediaries to channel the first tranche of funds to final
beneficiaries has already ended, and therefore there is no possibility to extend the tender and
change its terms and conditions in order to include dormitories. This will be possible at the
time when the second tender is launched. For this tender documents should be appropriately
amended.
4. The study assessed the scope of renovation. Detailed calculations were made in order to
measure the magnitude of the renovation problem and primarily targeted student dormitories
of three types, namely those of a) universities, b) colleges and c) vocational education and
training (VET) institutions. These calculations were made for two scenarios, under which a)
only energy efficiency measures (as defined in the applicable EU regulations) would be
implemented or b) complex (full) renovations would be made. For all three types of
dormitories, the total of investments needed for energy efficiency measures alone amounts
to LTL 149.9 mio (an average of LTL 205.9 for 1 m²). Complex renovation was estimated to
cost LTL 238.7 mio (or an average of LTL 325.5 for 1 m²).
The total area of dormitories of higher education institutions to be renovated comprises

462.6 thousand m², of which university dormitories make up 315.6 thousand m² and college
dormitories 147 thousand m². In addition to this, the total area of dormitories of VET
institutions to be renovated is 262 thousand m².
61
5. Due to the lack of detailed data about other (public) buildings, calculations were based on an
average investment amount per 1 m² of VET dormitories, which for energy efficiency
measures is LTL 231.9. Total area of other public buildings of VET institutions is 684.4
thousand m² and total amount of funds needed to implement energy efficiency measures
would approximately be LTL 158.7 mio. When the data is available, the investment needed
for public buildings of other educational and scientific institutions can be estimated by using
the same method of extrapolation.
6. Modernisation of dormitories should be financed on the basis of the reduction in energy

consumption so that the savings help the pay back of loans irrespective of the borrower.
Loan payback could be ensured by: a) the rent paid by residents of dormitories; b) energy
savings and smaller demand for funds to pay for energy – approximately 75–80% of savings
should be used for loan servicing. If, according to the calculations, the savings amount to
LTL 11.46/m², LTL 8.6–9.2/m² annually could be directed to loan servicing. The remaining
amount required for loan servicing could comprise of the income received for the services
provided to inhabitants.
7. A soft loan with the fixed annual interest rate of 3% should be granted for a period of up to
20 years in case of energy efficiency measures. In case of complex renovation the credit
period should not be shorter than payback period of the measures implemented. It is
suggested that the maximum amount of the soft loan is 100% of the project value if
education institutions borrow themselves, and 95% of the project value in all other cases
(when borrowing is undertaken by concessionaire or contractor).
8. A loan should be granted only if the investment project provides for the implementation of
energy efficiency measures along with other modernisation measures, which ensure at least
20% energy savings per year. Calculations show that after modernisation and
implementation of energy efficiency measures, energy consumption will be reduced by 30%
on average.
9. 15% of state support could be provided to the implemented projects (i. e. the corresponding
amount of the payback would be waived) under the same conditions as it is provided to
multi-apartment buildings, where state support is provided in case the renovated building
achieves energy efficiency category C. The calculations of investments and payback periods
were respectively made for a scenario without state support.
10. Five financing schemes were examined in the study, namely: 1) loan by the dormitory
manager, 2) loan by the designated state owned limited liability legal entity, 3) ESCO
(Energy Service Company) scheme, 4) concession scheme, and 5) factoring scheme.
Strengths and weaknesses were examined for all schemes individually. The first three
schemes would be possible only for application of energy efficiency measures from the
JESSICA instrument, while the last two schemes could be used for more ambitious
(complex) modernization which in addition to energy efficiency measures would also target
complex renovation measures. Of the five schemes, loan by the dormitory manager and
concession schemes seem to be most promising in achieving the aims of dormitory
renovation. If renovation aims at solving the problems beyond energy efficiency measures,
then the concession scheme should be advanced further.
62
ANNEXES
Annex 1. Current set up of the JESSICA instrument for energy efficiency in

housing in Lithuania
Source: JESSICA Holding Fund Lithuania
63
Annex 2. Questionnaire for collection of data about student dormitories (used in
this study)
This questionnaire was channelled through the Ministry of Education and Science and
answered by managers of student dormitories of higher education institutions and vocational
education and training schools during 1–10 December 2009. The answers were received from
27 higher education institutions and 69 vocational education and training schools (see
electronic form in CD-ROM).
Basic data
Name of the higher education institution*

Address of the dormitory*
Year of construction*
Information on the management of the dormitory
Owner of the dormitory*

Manager of the dormitory*
Grounds for management (trust, contract for use, other [please indicate])*
Contact person and contact information (tel., e-mail)
Basic data about the dormitory
Total area (m²)*

Total area of living premises (rooms) (m²)
Heating area (m²)*
Number of stairwells
Height (number of floors)
Hot water consumption (m³) per calendar year
Energy consumption for heating (MWh) during the heating season
Electricity consumption (MWh) per calendar year
Actual number of places of residence

Number of residing persons
Occupancy (%)
Information on the renovation works needed
Insulation of facade walls (m²)

Modernisation of the heating point (yes/no)
Reconstruction of heating and hot water systems (m)
Reconstruction of the roof by additional insulation (m²)
Replacement of windows (m²)
Replacement of cold water system (m)
Replacement of sewage pipes (m)
Replacement of the electricity installation (m)
Replacement of the lift

Renovation of balconies (m²)
64
Main problems of the building [please indicate]
* only the questions marked by an asterisk should be answered for student dormitories other than belonging to
state higher education institutions and other buildings under the jurisdiction of the Ministry of Education and
Science (see description of the scope of the study in this report). For these buildings, the potential energy savings
and costs of renovation will be calculated by using these aggregate data and extrapolations made from the
individual calculations about the student dormitories of the state higher education institutions.
65
Annex 3. List of stakeholders interviewed and sources consulted for the purposes
of this study
It benefited from the discussion with Mr Brian Field, Urban Planning and Development Adviser
of the JESSICA Holding Fund Lithuania, and exchanges of the views with the Lithuanian
beneficiaries, namely,
No Name of institutions Date of interview Interviewee

1. Ministry of Education and 24 November 2009 and 28 • Mr Dainius Numgaudis,
Science of the Republic of December 2009 Chancellor of the Ministry of
Lithuania Education and Science
• Ms Laima Kvaraciejien÷, Head
of Construction and Investment
Unit of the Economics
Department
• Ms Svetlana Krotkova, Senior
Expert of Construction and
Investment Unit of the
Economics Department
• Mr Romualdas Pusvaškis,
Deputy Director of the
Department of General
Education and Vocational
Training
• Ms Egidija Kasperiūnien÷,
Senior Expert, EU Assistance
Programme Implementation
Division
2. Ministry of Finance of the 24 November 2009 and 7 • Ms Ieva Vilimien÷, Director of
Republic of Lithuania January 2010 Operational Programmes
Management Department
• Ms Loreta Maskaliovien÷,
Deputy Director of Operational
Programmes Management
Department
• Mr Gvidas Dargužas, Head of
Unit for Management of the
Operational Programme for
Cohesion Promotion
• Mr Ignotas Šalav÷jus, Senior
Expert of Unit for Management
of the Operational Programme
for Cohesion Promotion
• Mr Audrius Želionis, Director
of State Treasury Department
• Mr Gediminas Norkūnas,
Deputy Director of State
Treasury Department
• Ms Dalia Žygien÷, Head of
Finance Statistics Division
• Mr Darius Sadeckas, Deputy
Director of Budget Department
• Ms Diana Vaitiekūnien÷,
66
No Name of institutions Date of interview Interviewee
Deputy Director of Asset
Management Department
• Ms Aušra Viškačkien÷, Director
of Asset Management
Department
• Miss Živil÷ Pilkauskait÷, Senior
Specialist of Operational
Program for Promotion of
Cohesion Division
3. Vilnius University and 4 December 2009 • Dr. Aleksas Pikturna, Deputy
public company Vilniaus Rector for Administrative
universiteto būstas Affairs of the University,
• Mr Lionginas Striganavičius,
Director for General Afairs of
the University
• Mr Nerijus Cicilionis, Director
of a public company Vilniaus
universiteto būstas
4. Vilnius College 18 December 2009 • Mr Virgilijus Varatinskas,
Manager of Dormitories
5. Klaip÷da University 15 January 2010 • Mr Antanas Lukoševičius,
Deputy Rector for Infrastructure
6. City Service AB 10 December 2009 and 21 • Mr Vytautas Turonis, Managing
December 2009 Director for Lithuania,
• Mr Rimvydas Juodis, Manager
of Renovation Projects
7. Lithuanian District Heating 5 January 2010 (telephone • Mr Vytautas Stasiūnas,
Association and e-mail) President
67
Annex 4. Investment for renovation of student dormitories managed higher and vocational education institutions in 2000–2009
Table 4.1. Distribution of funds for renovation of student dormitories managed by higher education institutions in 2000–2009 (in thousand LTL)*
Investment
project for
Allocations renovation
Allocations
from State of higher Funds of Renovation program for higher
from
Investment education education institutions – managed students Total
No Higher education institution Privatization
Program institutions dormitories
Fund
(SIP) – managed
students
dormitories
2000–2006 2003 2006 2007 2008 2009 Total 2007 2008 LTL %
1 Alytus College 476 93 102 671 63 734 3,95
2 Kaunas College 203 459 830 1.492 631 313 2.436 13,09
Kaunas Forestry and Environment Engineering
3 384 180 200 764 123 887 4,77
College
4 Kaunas Technical College 116 120 236 79 315 1,69
5 Klaip÷da College 483 225 250 958 153 1.111 5,97
6 Klaip÷da Business and Technology College 531 268 290 1.089 183 1.272 6,84
7 Lithuanian Maritime College 427 161 180 768 110 878 4,72
8 Marijampol÷ College 441 264 290 995 180 1.175 6,32
9 Panev÷žys College 240 260 500 164 664 3,57
10 Šiauliai College 531 209 230 970 142 1.112 5,98
11 Utena College 214 202 220 636 138 774 4,16
12 Vilnius College 475 1.099 1.200 2.774 749 3.523 18,94
13 Vilnius Technology and Design College 531 457 683 1.671 312 1.983 10,66
14 Vilnius Technical College 187 108 0 295 74 369 1,98
15 Žemaitija College 489 319 345 1.153 217 1.370 7,36
Continuation of Table 4.1. Distribution of funds for renovation of student dormitories managed by higher education institutions in 2000–2009 (in
thousand LTL)*
Investment
project for
Allocations renovation
Allocations
from State of higher Funds of Renovation program for higher
from
Investment education education institutions – managed students Total
No Higher education institution Privatization
Program institutions dormitories
Fund
(SIP) – managed
students
dormitories
2000–2006 2003 2006 2007 2008 2009 Total 2007 2008 LTL %
Total for Colleges 0 5.372 4.400 5.200 14.972 631 3.000 18.603 100
16 Kaunas Medical University 384 465 1.781 372 443 3.061 277 3.722 7,32
17 Kaunas Technology University 1.528 831 1.089 615 1.036 1.324 4.064 772 7.195 14,15
18 Klaip÷da University 272 370 109 290 0 769 216 1.257 2,47
19 Lithuanian Academy of Physical Education 114 138 122 141 401 91 606 1,19
20 Lithuanian Music and Theatre Academy 114 163 74 88 325 55 494 0,97
21 Lithuanian Veterinary Academy 141 85 171 205 461 127 729 1,43
22 Lithuanian University of Agriculture 4.355 303 531 433 512 1.476 323 6.457 12,7
23 Mykolas Riomeris University 218 163 327 376 866 244 1.328 2,61
24 Šiauliai University 258 479 432 503 1.414 643 322 2.637 5,19
25 Vilnius Academy of Fine Arts 474 136 140 119 142 401 89 1.100 2,16
26 Vytautas Didysis University 7.605 254 364 330 396 1.090 246 9.195 18,09
27 Vilnius Gedimino Technical University 591 873 847 1.084 2.804 654 631 4.680 9,21
28 Vilnius Pedagogical University 353 411 519 610 1.540 102 468 2.463 4,84
29 Vilnius University 1.031 1.729 1.123 1.528 1.976 6.356 447 1.139 8.973 17,65
Total for Universities 13.962 5.000 7.000 3.628 6.600 7.800 25.028 1.846 5.000 50.836 100
Total 13.962 5.000 7.000 9.000 11.000 13.000 40.000 2.477 8.000 69.439
Source: Ministry of Education and Science
*– approved plan
69
Table 4.2. Planned and actually spent investment for renovation of student dormitories in 2000–2009 (in thousand LTL)
2006 2007 2008 2009 2010
Investment programs Approved Actual Approved Actual Approved Actual Approved Actual
Plan
plan implementation* plan implementation* plan implementation* plan implementation*
Programme for Renovation of
Student Dormitories of Higher 7.000 6.552 9.000 11.476 11.000 19.000 13.000 12.992 6.670
Education Institutions
Renovation of students dormitories
managed by public vocational 2.630 2.601 4.500
Source: Budget Department of the Ministry of Finance
*– actual costs include allocations from State Investment Program and Privatization fund
70
Annex 5. Detailed calculations for possible concession scheme for three (typical)
student dormitories of the Vilnius University
Three typical student dormitory buildings design-wise of the Vilnius University were chosen in
order to make individual calculations for the cost of renovation of the energy efficiency
measures and complex measures based on the data supplied by the University and the public
company Vilniaus universiteto būstas on the current conditions in the dormitories, rents paid by
the students and design of the buildings.
The calculations are based on the following assumptions:

1. The calculations were made to estimate the total investments required for energy-efficiency
measures and other modernisation measures. The annual interest rate of 3% is applied to
energy-efficiency measures and the annual interest rate of 5% to other modernisation
measures. All investments are calculated for the 7-year period.
2. The calculations of the total area of facades, roofing, pipes, etc. to be modernised are based
on the data on university dormitories provided by a public company Vilniaus universiteto
būstas.
3. The calculations of prices of and investments into separate modernisation measures are
based on the current market prices which may increase or decrease depending on the
economic situation and situation in the construction industry.
4. The calculation of energy costs are based on the actual consumption of hot water, heating
energy and electric energy within 1 year. The amount and savings of energy costs are
calculated at the current market prices.
5. The calculations of savings of energy costs after the modernisation are based on the
following coefficients:
• hot water – 15%;
• heating energy – 20%;
• electric energy – 10%.
6. The total 7-year energy savings are not included in the project payback, therefore it is
essential to take this factor into account as the actual savings in the final payment for the
modernised dormitory may also change the amount to be paid by the student for the room
rent.
7. The average annual funds allocated to the dormitory repair and renovation are not taken into
account. It is important to note that the running and repair costs in the subsequent years after
complex renovation will be much lower than before modernization.
The margin of error in calculations is inevitable because of the following reasons:

1. Inaccurate calculations of the total area of facades, windows, roofing, pipes, etc.
2. Project administration costs are not taken into account.
3. There are no accurate data on the rent students pay for a certain room, i.e. how many
students live in a certain type of rooms. The calculations are based on a double-room rent
per person when two people live in it.
4. The modernisation of the heating system should consider the replacement of radiators into
new ones with smaller water capacity.
Table 5.1. Calculations for possible concession scheme for student dormitories of Vilnius University (option 1)
Investments Investments
Amount Investments for energy- Investments for for other
Total area Actual currently for energy- saving other modernizati
Number of Number of Total area,
Address of living number of paid for saving measures modernization on measures
floors staircases m2
places, m2 living places rent, in measures, in with interest measures, in with interest
LTL/month LTL of 3%, in LTL rate 5%, in
LTL LTL
Saul÷tekio
5 1 2,144.85 999.47 172 170.00 527,315.00 583,342.22 1,173,432.50 1,381,227.84
49, Vilnius
448,217.75 495,840.89
Continuation of Table 5.1. Calculations for possible concession scheme for student dormitories of Vilnius University (option 1)
Energy consumption savings, in LTL Investments
Investments Amount to be
Energy Energy Investments for the
Total less 15% Investments paid for rent
Hot water, Heat Electricity, savings per savings per for total number of
investments, state for total and
in energy, in in year, in 7 years, in living area, actual living
in LTL support, in area, in LTL modernization,
LTL/year LTL/year LTL/year LTL LTL in LTL places, in
LTL in LTL
LTL
1,964,570.06 1,877,068.72 10,285.94 6,972.00 6,278.00 23,535.94 164,751.55 875.15 1,878.06 10,913.19 299.92
Amount Investments Investments for
Total area Actual currently for energy- other
Number of Number of Total area, Interest rate Interest rate
Address of living number of paid for saving modernization
floors staircases m2 3%, in LTL 5%, in LTL
places, m2 living places rent, in measures, in measures, in
LTL/month LTL LTL
Saul÷tekio 8,
16 2 6,498.67 3,398.15 504 170.00 1,764,977.63 3,490,521.50 3,490,521.50 4,108,634.68
Vilnius
1,500,230.98 –
Investments
Energy Energy Investments for the Amount paid
Total with 15% Investments
Hot water, Heat Electricity, savings per savings per for total number of for rent and
investments, state for total
in energy, in in year, in 7 years, in living area, actual living modernization,
in LTL support, in area, in LTL
LTL/year LTL/year LTL/year LTL LTL in LTL places, in in LTL
LTL
LTL
5,873,612.31 5,608,865.66 23,318.99 20,003.00 23,688.83 67,010.81 469,075.70 863.08 1,650.56 11,128.70 302.48
73
Investments Investments for
Amount
Total area Actual for energy- other
Number of Number of Total area, paid for Interest rate Interest rate
Address of living number of saving modernization
floors staircases m2 rent, in 3%, in LTL 5%, in LTL
places, m2 living places measures, in measures, in
LTL/month
LTL LTL
Didlaukio
12 2 9,127.9 4,338.6 638 170.00 2,063,204.00 2,282,419.43 4,808,455.00 5,659,952.24
59, Vilnius
1,753,723.40 1,940,056.51
Investments
LTL
LTL
7,942,371.66 7,600,008.75 29,915.45 31,623.00 23,773.93 85,312.38 597,186.65 832.61 1,751.72 11,912.24 311.81
74
Investments Investments for
Amount
Total area Actual for energy- other
Number of Number of Total area, paid for Interest rate Interest rate
Address of living number of saving modernization
floors staircases m2 rent, in 3%, in LTL 5%, in LTL
places, m2 living places measures, in measures, in
LTL/month
LTL LTL
Saul÷tekio
5 2 4,635.57 2,297.05 382 170.00 975,348.50 1,078,979.28 2,397,006.50 2,821,476.40
47, Vilnius
829,046.23 917,132.39
Investments
LTL
LTL
3,900,455.68 3,738,608.79 22,386.32 11,080.50 13,459.00 46,925.82 328,480.76 806.50 1,627.57 9,786.93 286.51
75
Annex 6. A short summary of partially implemented ESCO scheme for energy
efficiency by the Vilnius City Municipality
The description of this scheme was supplied by City Service AB. The agreement described
below most likely will not be renewed because of the changes in the national legislation.
The description of this scheme was supplied by City Service AB. The agreement described
below most likely will not be renewed because of the changes in the national legislation.
Following the contract for partial ESCO scheme concluded with the Vilnius City Municipality
in 2002, City Service AB has taken over the operation, repair and damage control of heating
stations and heating systems, cold water and sewerage systems of 245 objects (education
institutions) belonging to the Education Department. City Service AB also provides emergency
call centre services 24/7. Heating and hot water are supplied to these objects on the fixed
budget principle. The comparison of the actual heating consumption per year (approx.
133,907 MWh/year) in 1998–2001 and the heating consumption (119.549 MWh/year)
established under the contract in 2002–2008 shows that 11% of the heating energy is saved
(which is LTL 3.8 million, VAT included, at prices of 2009).
City Service AB invested into the heating and hot water systems of the buildings, including the
replaced of the worn valves, pipes, radiators and heaters, the mounting of balancing valves,
thermometers and other equipment and devices. Education institutions were provided with
remote control and monitoring system Rubisafe. The system monitors objects 24/7, hence, in
case of any trouble, Rubisafe immediately detects it and responds respectively.
The rate established by the contract for the operation of heating and hot water systems,
accident localisation, repair and so called “eternal warranty” (which ensures the repair,
replacement and renovation of parts of all the said systems for the operation fee) is
LTL 0.22/m²/month (VAT included). For instance, in 2004 the Vilnius City Council
established a rate of LTL 0.24/m²/month (VAT included) only for the maintenance of heating
and hot water systems. City Service AB undertook to perform operation, repair and damage
control works in 2002–2008 for LTL 12.6 million (VAT included), however it performed the
aforementioned works for LTL 17.24 million (at public rates). The Vilnius City Municipality
saved LTL 4.68 million (VAT included).
Before the contract, the temperature in school premises was +17ºC and in kindergarten
premises +18 ºC. Since 2006, the temperature at schools has been maintained at +18 ºC, in
kindergartens at +21ºC, which meets Lithuanian hygiene standards.
Although the contract provides for 189,146 m³ of hot water, education institutions pay for the
actual hot water consumption. As a result, in 2002–2008 all education institutions consumed
92,020 m³ of hot water less and the Vilnius City Municipality saved LTL 1.3 million (VAT
included). City Service AB assumed by the contract to exploit cold water and sewerage systems
for free. In 2002–2008 the company invested LTL 1.28 million (VAT included) into the repair
of these systems.
The Vilnius City created additional 120 jobs related to this contract for the maintenance of
education institutions.
In the spring of 2008, the Vilnius City Municipality carried out the quality inspection of the
services provided by City Service AB in heating seasons 2006–2007 and 2007–2008.
According to the inspection results, the breakdowns and accidents are conditioned by the wear
of systems rather than by poor service quality. 88% of the institutions think that heating is of
good quality, 99% are satisfied with the quality of the works performed, 89% are happy with
the attention received and 100% consider the service culture to be of high quality.
To promote heating energy efficiency, the Vilnius City Municipality, education institutions and
City Service AB organise contests where institutions can contest their preparation for the
heating season, e.g. insulation of windows or doors, sealing of screens behind heating devices,
replacement of exterior doors, implementation of other energy efficiency measures. The annual
prize fund amounts to approx. LTL 67,000 and the total value of prizes for preparation for the
heating seasons comprises LTL 403,000. Education institutions use the funds won to acquire
various training measures and equipment, kitchen appliances, etc.
77
Annex 7. Summarised financial calculations for renovation of students dormitories
Table 7.1. Investments, needed for complex renovation of students dormitories, and payback period
Total Payback Payback
Renovated
investments for Investments State Funds Interest per period with period
area (in
Institutions complex into 1 m2 (in support to 1 required for year (in 15% state without state
thousand
renovation (in LTL) m2 (in LTL) 1 m2 (LTL) LTL) support (in support (in
m2)
LTL) years) years)
Universities 316 110,198,288.02 349.17 28.82 320.35 4.83 28.0 30.5
Colleges 147 45,876,777.18 312.09 29.04 283.04 4.26 24.7 27.2
262 82,588,694.00 315.22 34.78 280.44 4.22 24.5 27.5
Table 7.2. Investments, needed for energy efficiency measures in students dormitories, and payback period
Total
Payback Payback
Renovated investments for
Investments State Funds Interest per period with period
area (in energy
Institutions into 1 m2 (in support to 1 required for year (in 15% state without state
thousand efficiency
LTL) m2 (in LTL) 1 m2 (LTL) LTL) support (in support (in
m2) measures (in
years) years)
LTL)
Universities 316 60,642,151.31 192.15 28.82 163.33 2.46 14.3 16.8
Colleges 147 28,461,198.54 193.61 29.04 164.57 2.48 14.4 16.9
262 60,750,835.00 231.87 34.78 197.09 2.97 17.2 20.2
Annex 8. Territorial distribution of students dormitories in Lithuania
Name of town/ small Number of student dormitories80

town/ village University College Vocational Total
Vilnius 37 15 8 60
Kaunas 26 5 8 39
Klaip÷da 3 6 5 14
Šiauliai 4 2 3 9
Akademija 7 7
Panev÷žys 1 5 6
Marijampol÷ 3 1 4
Utena 3 1 4
Alytus 1 2 3
Telšiai 1 1 2
Plung÷ 2 2
Rietavas 2 2
Radviliškis 2 2
K÷dainiai 1 1 2
Ukmerg÷ 2 2
80
Data provided by the Ministry of Education and Science on 10 December 2009.
Name of town/ small Number of student dormitories80
town/ village University College Vocational Total
Šilut÷ 2 2
Raseiniai 1 1
Skuodas 1 1
Mažeikiai 1 1
Vilkija 1 1
Simnas 1 1
Taurag÷ 1 1
Var÷na 1 1
Visaginas 1 1
Rokiškis 1 1
Kupiškis 1 1
Biržai 1 1
Smalininkai 1 1
Kaišiadorys 1 1
Joniškis 1 1
Kurš÷nai 1 1
Raudondvaris 1 1
Kelm÷ 1 1
Daugai 2 2
Girionys 2 2
Mastaičiai 2 2
Pajūris 2 2
Varniai 2 2
Dievenišk÷s 1 1
Bukišk÷s 1 1
Vabalninkas 1 1
Aukštadvaris 1 1
Lančiūnava 1 1
Viekšniai 1 1
Cirkliškis 1 1
Kailiniai 1 1
Kretingsodis 1 1
Dimitrišk÷s 1 1
Aukštieji Kapliai 1 1
Būbeliai 1 1
Budraičiai 1 1
80
BIBLIOGRAPHY
EU legal acts and other documents:

1. European Parliament and Council Regulation (EC) No 1080/2006 of 5 July 2006 on the
European Regional Development Fund and repealing Regulation (EC) No 1783/1999,
Official Journal, 2006, L 210 (with later amendments);
2. Council Regulation (EC) No 1083/2006 of 11 July 2006 on the European Regional
Development Fund, the European Social Fund and the Cohesion Fund and repealing
Regulation (EC) No 1260/1999, Official Journal, 2006, L 210 (with later amendments);
3. Council Regulation (EC) No 1828/2006 of 8 December 2006 on the rules for the
implementation of Council Regulation (EC) No 1083/2006 on the European Regional
Development Fund, the European Social Fund and the Cohesion Fund and of Regulation
(EC) No 1080/2006 of the European Parliament and of the Council on the European
Regional Development Fund, Official Journal, 2006, L 371 (with later amendments);
4. Decision of the European Commission No C(2007) 3738, CCI 2007LT161PO0001 of 30
July 2007 (with later amendments).
Lithuanian legal acts and other documents:

1. Civil Code of the Republic of Lithuania (adopted by Law No VIII-1864 by the Seimas of
the Republic of Lithuania of 18 July 2000 (Official Gazette No 74-2262, 2000));
2. Law of the Republic of Lithuania on Education No IX-1630 of 17 June 2003 (adopted by
the Seimas of the Republic of Lithuania (Official Gazette No 63-2853, 2003));
3. Law of the Republic of Lithuania on Science and Studies No XI-242 of 30 April 2009
(adopted by the Seimas of the Republic of Lithuania (Official Gazette No 54-2140,
2009));
4. Law of the Republic of Lithuania on Budget Structure No IX-1946 of 23 December
2003 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 4-47,
2004));
5. Law of the Republic of Lithuania on Concessions No IX-1647 of 24 June 2003 (adopted
by the Seimas of the Republic of Lithuania (Official Gazette No 70-3163, 2003));
6. Law of the Republic of Lithuania on Financial Institutions No IX-1068 of 10 September
2002 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 91-3891,
2002)), with later amendments;
7. Law of the Republic of Lithuania on Lending by Economic Entities to Natural and Legal
Persons No I-226 of 15 July 1993 (adopted by the Seimas of the Republic of Lithuania
(Official Gazette No 31-714, 1993)), with later amendments;
8. Law of the Republic of Lithuania on Construction No IX-583 of 8 November 2001
2001));
9. Law of the Republic of Lithuania on Possession, Use and Disposal of State and
Municipal Property No VIII-729 of 12 May 1998 (adopted by the Seimas of the
Republic of Lithuania (Official Gazette No 54-1492, 1998)), with later amendments;
10. Law of the Republic of Lithuania on Heat Sector No IX-1565 of 20 May 2003 (adopted
by the Seimas of the Republic of Lithuania (Official Gazette No 51-2254, 2003)), with
later amendments;
11. Enterprise Bankruptcy Law of the Republic of Lithuania No IX-216 of 20 March 2001
2001)), with later amendments;
12. Law of the Republic of Lithuania on Local Self-Government No X-1722 of 15
September 2008 (adopted by the Seimas of the Republic of Lithuania (Official Gazette
No 113-4290, 2008));
81
13. Law of the Republic of Lithuania on Budgetary Institutions No I-1113 of 5 December
1995 (adopted by the Seimas of the Republic of Lithuania (Official Gazette No 104-
2322, 1995)), with later amendments;
14. Law of the Republic of Lithuania on the Territorial Administrative Units of the Republic
of Lithuania and Their Boundaries No I-558 of 19 July 1994 (adopted by the Seimas of
the Republic of Lithuania (Official Gazette No 60-1183, 1994)), with later amendments;
15. Resolution of the Government of the Republic of Lithuania No 843 of 1 September 2006
on the Approval of the Programme for the Renovation of Student Dormitories of Higher
Education Institutions (Official Gazette No 94-3699, 2006);
16. Resolution of the Government of the Republic of Lithuania No 559 of 10 June 2009 on
the Approval of the Programme for the Renovation of Education Institutions (Official
Gazette No 72-2916, 2009);
17. Resolution of the Government of the Republic of Lithuania No 696 of 17 May 1995 on
the Classification of Economic Activities (Official Gazette No 43-1054, 1995);
18. Resolution of the Government of the Republic of Lithuania No 1139 of 9 September
2007 on Allocation of Functions and Responsibilities of Authorities for the
Implementation of the Lithuanian Strategy for the use of EU Structural Assistance
Strategy for 2007–2013 and Operational Programmes (Official Gazette No 114-4637,
2007);
19. Resolution of the Government of the Republic of Lithuania No 243 of 5 March 2008 on
replacement of the Resolution No 1213 of 23 September 2004 on apartment-house
modernization program (Official gazette No 36-1282, 2008);
20. Resolution of the Government of the Republic of Lithuania No 428 of 8 April 2003 on
the Determination of Criteria for Problematic Territories (Official Gazette No 35-1483,
2003; No 14-479, 2006);
21. Technical regulation for construction STR 1.01.09:2003 on Classification of Buildings
According to their purpose (adopted by Order No 289 of the Minister of Environment of
the Republic of Lithuania of 11 June 2003 (Official Gazette No 58–2611, 2003));
22. Technical regulations of construction STR 2.01.01(3):1999 on Essential Requirements
for Buildings. Hygiene, Health and Environmental Protection (adopted by Order No 549
of the Minister of Environment of the Republic of Lithuania of 21 October 2002
(Official Gazette No 106-4776, 2002));
23. Technical regulation of construction STR 2.09.02:1998 on Heating, Ventilation and Air
Conditioning (adopted by Order No 19 of the Minister of Environment of the Republic
of Lithuania of 18 January 1999 (Official Gazette No 13-333, 1999; No 39-1446, 2002;
No 145-5552, 2006));
24. Technical regulation of construction STR 2.01.01(6):2008 on Essential Requirements for
Buildings. Energy Saving and Heat Retention (adopted by Order No D1-131 of the
Minister of Environment of the Republic of Lithuania of 12 March 2008 (Official
Gazette No 35-1255, 2008));
25. Hygiene Norm HN 118:2002 on Health Safety Requirements for Accommodation
Services (adopted by Order No V-2 of the Minister of Health Care of the Republic of
Lithuania of 6 January 2003 (Official Gazette No 13-531, 2003));
26. Hygiene Norm HN 35:2007 on Maximum Permitted Concentration of Chemical
Substances (Pollutants) in Ambient Air of Residential Environment (adopted by Order
No V-1191 of the Minister of Health Care of the Republic of Lithuania of 5 December
2008 (Official Gazette No 145-5858, 2008));
27. Hygiene Norm HN 42:2004 on Microclimate in residential and public utility buildings
(adopted by Order No V-479 of the Minister of Health Care of the Republic of Lithuania
of 29 June 2004 (Official Gazette No 105-3911, 2004));
28. Order of the Minister of Health Care of the Republic of Lithuania No V-791 of 5
October 2007 on Approval of the List and Permissions – Hygiene Passports Rules for
82
Commercial Activities, for which Hygiene Passports are Mandatory (Official Gazette No
106-4352, 2007), with later amendments;
29. Rules on Preparation and Implementation of Public Private Partnership Projects (adopted
by Decision No 1480 of the Government of the Republic of Lithuania of 11 November
2009 (Official Gazette No 137-5998, 2009));
30. Rules on Attribution of the Entities to Institutional Sectors and Subsectors (adopted by
Order No DĮ-172 of the Chief of Department of Statistics under the Government of the
Republic of Lithuania of 2 August 2005).
Lithuanian programmes and strategies:

1. Investment project of renovation students dormitories managed by vocational education
institutions, the Ministry of Education and Science of the Republic Lithuania, June 2008;
2. Renovation program for students dormitories, managed by higher education institutions
(II stage), the Ministry of Education and Science of the Republic Lithuania, October
2009;
3. JESSICA Evaluation Study for Lithuania, January 2009;
4. Supplementary Study on JESSICA instruments for energy efficiency, April 2009.
Other sources:
1. European Investment Bank website www.eib.org;
2. EU structural support for Lithuania 2007–2013 website www.esparama.lt;
3. Ministry of the Interior of the Republic of Lithuania website www.vrm.lt;
4. Ministry of Environment of the Republic of Lithuania website: www.am.lt;
5. Apartment-house modernization program website: www.atnaujinkbusta.lt;
6. Housing and Urban Development Agency (HUDA) website: www.bkagentura.lt;
7. Centre of Information Technologies for Education website: http://www.itc.smm.lt.
83

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JESSICA

JOINT EUROPEAN SUPPORT FOR SUSTAINABLE

JESSICA INSTRUMENT FOR ENERGY EFFICIENCY IN

Table 1. Full modernisation of dormitories .................................................................................10

Figure 1. Further education of general upper secondary school graduates .................................32

The stakeholder analysis reveals that, in order to be successful, application of JESSICA

Investments actually made in the framework of implementation of the Programme for

Table 1. Full modernisation of dormitories

Universities 349.17 28.82 320.35 4.83 28.0 30.5

Colleges 312.09 29.04 283.04 4.26 24.7 27.2

Table 2. Implementation of energy efficiency measures only

Colleges 193.61 29.04 164.57 2.48 14.4 16.9

Modernisation of dormitories of education institutions should be financed on the basis of the

1.1. Context of Study

1.2.1. Current set up of the JESSICA instrument

Ministry of Finance as managing authority participates in the scheme of renovation of housing

1.3. Existing relevant EU and Lithuanian legislation and programmes as regards

2.1.1. Eligibility of student dormitories: student dormitories as housing

Accordingly, as under national legislation student dormitories are considered to be premises of

2.1.2.1. Provisions of Regulation No 1080/2006

Accordingly, provisions of Regulation No 1080/2006 directly themselves do not establish

2.1.2.2. Cohesion Promotion Operational Programme for the years 2007–2013

Meanwhile, as for modernisation of public buildings (including buildings of educational

2.1.3. Eligible modernisation measures

Regulation No 1080/2006 establishes certain restrictions on eligible expenditure on the housing.

1. Expenditure shall be programmed within the framework of an integrated urban development

(a) a high level of poverty and exclusion;

2. The allocation to housing expenditure shall be either a maximum of 3% of the European

Accordingly, only energy efficiency improvements as it is defined in Article 7.1(a) of

2.1.4. Required amendments of legal acts

a. Regulation No 787 of the Government of the Republic of Lithuania regarding Confirmation

3.1. Stakeholder analysis

3.1.1. Ministry of Education and Science

3.1.2. Ministry of Finance

According to the Governmental Resolution32, the Ministry of Finance of the Republic of

3.1.3. Ministry of Environment

The Ministry of Environment as intermediary authority is responsible for implementation of

The Ministry of Environment coordinates implementation of the measures of the Programme

3.1.4. Higher education institutions (universities and colleges)

3.1.5. Authorized agencies

According to the Regulation 1828/2006, the body implementing functions of an urban

HUDA participates in the implementation of JESSICA programme46 for renovation of multi-

CPMA could be involved in implementation of JESSICA instruments for energy efficiency in

3.1.6. Energy service companies (ESCO)

3.1.7. Potential concessionaires

Private companies providing building maintenance (building administration) services could

Municipal enterprises (i.e. companies founded by municipalities) also provide building

3.1.8. Municipalities (as founders of secondary schools)

3.3.1. Number of students (higher education institutions, vocational training, secondary

Table 3. Number of students in the beginning of the academic year

Figure 1. Further education of general upper secondary school graduates

60 Graduated from upper secondary

Source: Statistical Yearbook of Lithuania 2009 (Department of Statistics of Lithuania)

3.3.2.1. State higher education institutions

Figure 2. Occupancy rates at student dormitories of Lithuanian state higher education

Number of universities–managed students ' dormitories Number of colleges–managed students' dormitories

Figure 3. Distribution of dormitories of state higher education institutions according to their

According to the Classifier of Economic Activities (rev. 1.1)59, accommodation in student

Number of students' dormitories managed by vocational education ins titutions

The newest among of 86 dormitories of vocational education and training institutions is

Figure 5. Distribution of student dormitories of state vocational education and training

Evidently, improvements to the technical condition of dormitories were made by renovations