The city of Vilnius on Thursday signed a 25-million-euro loan agreement with the European Investment Bank (EIB).
Vilnius
© DELFI / Šarūnas Mažeika

This is the first 25-million-euro tranche of a 50-million-euro loan facility. The second tranche is expected to be signed next year.

"I can assure you that this loan is not because Vilnius is in a desperate situation, but because we need it to take a bold step. It is aimed at helping us carry out projects," Vilnius Mayor Remigijus Šimašius said at a news briefing.

He said that part of the money will go toward various infrastructure projects, such as the construction of kindergartens and modernization of the capital's lighting and electricity networks.

"We are a bank and a bank wants its money back. (...) We have made proper due diligence and we are convinced that the money will be returned," EIB Vice President Jan Vapaavuori said at the news briefing.

Alma Vaitkunskienė, the municipality's director of administration, said that some 12 million euros out of the first tranche will be used to refinance the most costly loans (from the Finance Ministry and SEB Bankas).

The EIB loan carries an interest rate of 0.38 percent and the bank's margin is 0.2 percent.

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