The European Commission has approved more than €800 million in Lithuanian state support for the country’s development bank ILTE, alongside yearly tax and dividend exemptions worth €15 million.
The package includes €813 million in capital injections in the form of equity, as well as exemptions from paying corporate income tax and dividends, the Commission informed on Tuesday.
The measures were notified by Lithuania and provided by the Ministry of Finance.
ILTE — short for *Investicijos į Lietuvos ekonomiką* — is expected to use the funding to support investments in areas where projects can struggle to secure enough private finance.
Eligible projects include business investment in agriculture, renewable energy, district heating, building refurbishment, transport, energy, defence, digital infrastructure and social infrastructure.
Some projects in those areas can be harder to finance because of high upfront costs, long payback periods, higher risk, limited appetite from lenders or other requirements from private financiers.
How the decision was made
The Commission assessed the support under EU State aid rules, including Article 107(3)(c) of the EU treaty, which allows member states to back certain economic activities under specific conditions, it said.
Lithuania committed to limiting ILTE’s financial activities to areas with relevant market gaps and to measures intended to avoid undercutting private financial institutions in Lithuania.
A non-confidential version of the decision will be published in the Commission’s State aid register under case number SA.120268 once confidentiality issues have been resolved.
