The law on national promotional institutions is adopted
There is a need to address the funding gap in various areas where financially viable projects are not able to obtain funding due to high risk or long payback periods. Lithuania has started to create a legal framework for the operation of national promotional institutions (NPIs), which will contribute to the creation of a sound investment environment in Lithuania. The law, which will introduce more efficient investment in public infrastructure, business, innovation and integrated territorial development, was signed by the President of the Republic of Lithuania, Dalia Grybauskaitė.
‘National promotional institutions will allow for a clear institutional structure, ensure transparent use of public funds and encourage private fundraising. The legally defined status of NDIs is an important step towards strengthening the current network of state-owned financial institutions and providing them with the right tools to promote investment in Lithuania and increase efficiency. It will offer financial products that the market does not currently provide or does not provide sufficiently, which will reduce the dependence on European Union funding’, said Finance Minister Vilius Šapoka.
Currently, there are three state-owned financial institutions in Lithuania – the Public Investment Development Agency UAB (lith. UAB “Viešųjų investicijų plėtros agentūra”), the Investment and Business Guarantees UAB (lith. UAB “Investicijų ir verslo garantijos”) and the Agricultural Loan Guarantee Fund (lith. UAB “Žemės ūkio paskolų garantijų fondas”) , which manage funds or implement financial instruments. However, but none of them has the status of a national promotional institution, which they will be able to achieve after the entry into force of the law.
According to the Minister, the adoption of this law will not only stimulate investment and the use of financial instruments, but will also ensure their continuity – the funds borrowed or invested will be returned and used to finance other projects.
National promotional institutions can take more investment risk and invest in longer-term projects. They do not compete with market players (such as banks and venture capital management companies), but facilitate investment in areas where market funding is insufficient.
