OREANDA-NEWS. On September 26, 2007 the EBRD has signed a subscription agreement and a shareholders agreement related to its expected ?5 million equity investment in E-Energija, a private Lithuanian energy company, to promote private sector growth in the heating and hot water service sectors, reported the press-centre of EBRD.

The EBRD also intends to provide a ?15 million-loan in the near future to support the group’s regional expansion as it moves to Ukraine.

E-Energija has both residential and industrial clients in Lithuania and neighbouring Latvia, primarily operating district heating systems under concessions.

By taking an equity stake the EBRD is supporting increased private sector participation in district heating, a sector which is traditionally government-owned, and underpinning the drive towards improved services and better environmental standards.

Key to the project is also the support for E-Energija’s regional expansion. The loan will be aimed primarily at financing the company’s activities in Ukraine. Proceeds will also help finance energy saving investments in Lithuania and Latvia.

E-Energija has operations in the Lithuanian cities Prienai, Ukmerges, Akmenes and Trakai and is active in the Latvian cities Rezekne and Gulbene. The company recently entered into an agreement to start operations in the east Ukrainian city Artiomovsk.

Alexander Auboeck, EBRD Business Group Director for Infrastructure, said this project underscores clearly how standards can improve and how efficiencies can be achieved by supporting the growth of the private sector in the heating and hot water sectors. The expansion of the company outside the Baltic states and to the Ukrainian market is an important development that fosters regional business flows, he added.

Virginius Strioga, the CEO of E-Energija, said that the EBRD’s investment will help the company to increase its investments in green energy in Lithuania. In addition, it will help address two interrelated problems facing the Ukrainian district heating sector - energy efficiency and affordability. With the EBRD’s long term commitment, E-Energija will be able to make energy saving investments in a way that is affordable for consumers.

To-date, the EBRD has provided nearly ?300 million to finance district heating projects in its countries of operations and mobilised investments worth ?1 billion in the sector with its partners. More than half was to private sector development in the sector.