VIPA presents a new financial instrument for the development of free economic zones, industrial parks and other industrial areas
On 10 November 2021, UAB Viešųjų Investicijų Plėtros Agentūra (Public Investment Development Agency or VIPA) and the Ministry of Economy and Innovation of the Republic of Lithuania signed an agreement on the establishment and financing of the financial incentive measure “Installation of Typical Production Buildings in Free Economic Zones, Industrial Parks and Other Industrial Territories”.
EUR 41.4 million has been allocated for the implementation of the financial instrument from the state budget of the Republic of Lithuania, entrusting its management to VIPA. The funds of the measure will be used to finance investments in the development of economic infrastructure, construction or reconstruction, and installation of typical production, industrial and research buildings.
“This financial instrument is important in attracting investors who want to start their activities immediately. Foreign practice has shown that increasing availability of typical production buildings is particularly effective, focusing on such investors in particular. Therefore, we hope that the application of the measure will help to increase Lithuania’s competitiveness as well,” says Aušrinė Armonaitė, the Minister of Economy and Innovation.
From a decision to invest to the start of operations – no more than 2 months
A typical production building is a universal building suitable for production equipped with all the developed infrastructure. Such a building has been designed for standardized production with the possibility of expansion.
“An investor or a manufacturer gets a fully prepared infrastructure of the building and can start production processes from the first day of making the investment, using its own equipment and facilities, or adapting the premises within a maximum of 1 to 2 months. This is highly beneficial, as the time from a decision to invest till the start of operations is much shorter, creating flexible conditions for development,” says Gvidas Dargužas, CEO of VIPA.
Eligibility for loans
Funds under the financial instrument can be used to finance eligible costs of the construction of buildings, including costs of preparation for the construction, landscaping, installation or repair of the necessary infrastructure and engineering networks and systems on the land plot, as well as other maintenance costs of works directly related to the construction of buildings. Reconstruction of a previously constructed building in a free economic zone, industrial park or another industrial area is also considered eligible.
Long-term soft loans of up to EUR 10 million disbursed for up to 15 years will be provided to free economic zone management companies, their subsidiaries, industrial park operators (excluding natural persons) and municipalities.