World Bank and GEF Support Efficiency of District Heating in Lithuania

World Bank and GEF Support Efficiency of District Heating in Lithuania

Contacts: Washington: Miriam Van Dyck (1-202) 458-2931
e-mail: mvandyck@worldbank.org

Vilnius: Erlendas Grigoroviè (370-5) 210-7691
e-mail: egrigorovic@worldbank.org

WASHINGTON, June 10, 2003—The World Bank’s Board of Executive Directors today approved a US$6.5 million grant from the Global Environment Facility (GEF) to finance the Vilnius Heat Demand Management Project in Lithuania, which aims to reduce greenhouse gases emissions from the Vilnius District heating system by implementing financially sustainable and replicable energy efficiency investments in the residential sector of the Vilnius City.

The project will achieve this by: (a) co-financing Vilniaus Energija's demand management program which will demonstrate the benefits of automatic and consumer-controlled use of heat in homes and consumption-based billing at the apartment level, with limited grant financing for low-income customers; (b) creating a commercially sustainable (revolving) financial facility – Energy Conservation Program Commercial Fund – to support the implementation of investments aimed at reducing heat losses from the City's housing stock; and (c) implementing monitoring, evaluation, and information dissemination activities aimed at facilitating the replication of the project's outcomes.

The GEF Project will support and supplement the programs pursued by both Vilniaus Energija and Vilnius City Municipality. Under the project, the GEF will help establish a broader and more sustainable program to support the installation of energy efficiency equipment in residential buildings of Vilnius and engage Vilniaus Energija and the Vilnius City Municipality in the development of a market for energy efficiency products. This will be achieved by introducing demand-side management measures such as thermostatically controlled radiator valves and heat meters in Vilnius households, as well as building-envelope improvements to reduce energy losses from the residential buildings.

“The modernization of the Vilnius District Heating System, supported by the Municipality in partnership with Vilniaus Energija, promotes energy efficiency on both the supply and demand sides,” said Victor B. Loksha, World Bank Energy Economist and Task Manager for the Project. “The GEF support emphasizes the demand-side measures. Only with the inclusion of the demand-side efficiencies into the scope of the project, can its full economic and environmental benefits be achieved utilizing the synergy between the two sides of the process.

“This approach is highly replicable throughout Eastern Europe and the former Soviet Union, where many district heating systems as well as the housing stock are in need of a fundamental modernization to improve energy efficiency, and where investments in energy saving at the customer level have been lacking. The replication potential for the introduction of apartment-level billing based on modern technology for control and metering of heat consumption by multi-apartment building residents is particularly large. While this technology is not new in Eastern Europe, the capital of Lithuania will be among the first to introduce it in the Baltic States and the former Soviet Union.”

Since Lithuania joined the World Bank in 1992, Bank commitments total approximately US$473.7 million for 17 projects.

For more information about the World Bank in Lithuania, please visit:
http://www.worldbank.lt/

For more information about this project, please visit:
http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=details&eid=000094946_01080904110847

-###-