Lithuania needs over 31 billion euros to meet climate goals, facing investment challenges

Lithuania faces a significant investment challenge in achieving its climate goals, estimating a need for over 31 billion euros to fundamentally transform key sectors including energy, transport, industry, agriculture, waste, and construction. Audrius Šilgalis, head of the Green Finance Institute (ŽFI), emphasizes that decarbonization is not merely an environmental issue but a primary investment hurdle.

"The implementation of climate goals will depend not only on the availability of financial resources but also on whether a more favorable environment for business investment in decarbonization is created," Šilgalis stated. He highlighted the difficulty in assessing the scale of green and decarbonization financing in Lithuania due to data scarcity, despite the general recovery in corporate lending.

The primary challenge lies in channeling private capital into green transformation projects, as current financing availability is uneven. Smaller businesses, in particular, struggle to secure loans due to collateral requirements, project risks, and long investment payback periods. Šilgalis stressed that the issue is not just the quantity of funding but also the ability to direct it to projects with the highest decarbonization impact, necessitating better monitoring and clearer data on green financing needs.

Rūta Tumėnienė, head of New Energy Sources at "KN Energies," echoed these concerns, noting that financing remains a major obstacle for accelerating the energy sector's transformation. "Such projects often require extremely large initial investments, are associated with emerging technologies, have longer payback periods, and depend on the regulatory environment," she explained. This limits their attractiveness to private capital, especially when returns are not quick or easily predictable. Tumėnienė also pointed out that existing financing and support mechanisms do not always meet the needs of large non-industrial companies, which face decarbonization challenges but cannot always access support schemes under the same conditions as industrial firms.