fbpx Extraordinary apartment building reconstruction grant | KredEx

Purpose

WE WILL START ACCEPTING APPLICATIONS FROM 20 JULY.

The objective of the extraordinary apartment building reconstruction grant is to facilitate the reconstruction of apartment buildings to be energy-efficient, to improve indoor climate and safety, and to mitigate the effects of the emergency situation that was announced on 12 March 2020, in the construction sector. Applications will be accepted on a running basis until the allocated funds run out, considering that the decisions to satisfy applications must be made during 2020.


Benefits

  • Energy savings
  • Healthy indoor climate
  • A good as new and safe residential building
  • Better employment in the construction sector

For who?

  • apartment association
  • local municipality

Important conditions

  • The grant can be applied for fixing up an apartment building built before 2000, which has an apartment association or which is wholly owned by a local authority.
  • The grant rate is 30% in Tallinn and Tartu, 40% in the settlement units of rural municipalities bordering Tallinn and Tartu, where the market value of real estate exceeds 500 €/m2 in the year preceding the submission of the application according to the Land Board database of transactions, and also in the following cities, towns and small towns: Elva, Haapsalu, Keila, Kohila, Kuressaare, Maardu, Otepää, Paikuse, Pärnu, Rakvere, Rapla, Sauga, Uuemõisa, and Viljandi.
  • The rest of Estonia is eligible for a grant in the extent of 50%.
  • In other regions, except for Tallinn and Tartu, it is possible to apply for a 10% smaller grant, if all the prescribed conditions will not be fulfilled; for example, ventilation with heat recovery will not be installed, or the linear thermal bridge requirement for windows cannot be guaranteed.
  • In the case of settlement units and administrative units where the market value of real estate is below 200 €/m² in the year preceding the submission of the application according to the Land Board database of transactions, and in case of an apartment building located in Ida-Viru County, reconstruction of an apartment building may be performed partially, and in this case, the maximum proportion of the grant is 30% of the eligible costs of reconstruction works per project.
  • The maximum grant amount is EUR 1,000,000 per applicant; in the case of partial reconstruction, it is EUR 100,000 per applicant.
  • The works previously performed do not have to be redone if it is possible to achieve the required energy performance class with other works.
  • In the case of the thorough reconstruction of the residential building, the grant can only be applied for such reconstruction works that are reflected in the conforming main project.
  • The applicant must conclude a contract with a consultant or enterprise through which a technical consultant provides their service, except in the case that the applicant did not receive any offers for reasons beyond their control. A contract between a technical consultant and an apartment association shall be concluded by the moment of submitting the application, at the latest. This requirement is not applicable in case of partial reconstruction.
  • In the event of a thorough reconstruction of the residential building, the construction project presented during submitting the application will undergo expert evaluation, which shall be organised and paid for by KredEx.
  • After KredEx’s expert evaluation, and in case of thorough reconstruction of the residential building, the procedure of accepting tenders for reconstruction works will be performed through the Public Procurement Register. With partial reconstruction, it is required that 3 price offers be taken pursuant to the requirements set out in the Regulation.
  • The works performed with the support of the grant must be finished by 31 December 2021, at the latest.

Information required to apply

  • The grant can be applied for by:
    • a person with the right to represent the apartment association;
    • a rural municipality or city, if the apartment building is wholly owned by the local authority.
  • An application directed at achieving business objectives shall not be satisfied. Of the apartment ownerships located in one apartment building, at least 80% must be owned by a local authority or at least 5 different natural persons.
  • If the apartment building contains up to 5 apartment ownerships, every apartment ownership must have a different owner who is a natural person, or at least one apartment ownership must be owned by a local authority.
  • If the apartment building is wholly owned by a local authority, then all dwellings must be the local authority’s social or municipal dwellings.

The following costs related to the reconstruction of an apartment building will be supported:

  • reconstruction and thermal insulation of the façade, and the accompanying works;
  • reconstruction of balconies and loggias, installation of glass or replacement of balconies, and the accompanying works;
  • reconstruction and thermal insulation of the roof and ceiling roof, and the accompanying works;
  • replacement or renovation of windows, exterior and fire doors, and the accompanying works;
  • reconstruction and thermal insulation of the basement, and the accompanying works;
  • reconstruction and thermal insulation of the foundation, and the accompanying works;
  • replacement, reconstruction and balancing of the heating system, preparing a report on the balancing of the heating system, and the accompanying works;
  • installation, replacement or reconstruction of the water and sewerage system, and the accompanying works;
  • construction of a ventilation system with heat recovery or reconstruction of the ventilation system, preparation of the report on the surveying of the ventilation system, and the accompanying works;
  • purchase and installation of equipment necessary for use of local renewable energy;
  • partial or complete reconstruction of the control system and drive of an elevator, or replacement of an elevator, and the accompanying works;
  • replacement or reconstruction of the electrical system in public areas of the building, and the accompanying works;
  • installing the windows of public areas and apartments to be level with insulation, and restoration of interior finishing as a result of constructing the heating and ventilation system;
  • installation of ramps and handrails on landings to guarantee entry into and exit from the building, and the accompanying works;
  • preparation of a construction project and performance of the construction survey and building audit that are the basis for it;
  • using the service of a technical consultant for reconstruction works of the apartment building;
  • performance of owner supervision.

Since 1 January 2014, the expenses originating from the contract concluded with a technical consultant and the expense of preparing construction projects for reconstruction works (preliminary projects, main projects and work projects) are eligible for aid. If, pursuant to the contract concluded with the technical consultant, the technical consultant also performs owner supervision, the costs of performance of owner supervision are not eligible for aid before the date of submitting a request to the final beneficiary.

The costs of owner supervision are eligible if owner supervision is performed by a competent person set out in § 23 of the Building Code.

The costs of the technical consultant are eligible only if the respective person has been selected from the list provided on the website of SA KredEx, and a contract has been concluded with them by the time of submitting the application, at the latest.

Grants shall not be allocated to the following activities:

  • connecting the renewable energy production device with the distribution network (electricity, district heating, gas);
  • constructing barriers and parking areas for the registered immovable;
  • construction of an additional story, completion of an attic or socle floor and the costs of preparatory works related to these activities, excluding the addition of an elevator, balcony or awning;
  • other construction works that have not been specified as eligible activities and that are not related to improving the indoor climate of the apartment building, reconstruction of exterior envelope structures or heating systems, or the installation of equipment required to use renewable energy, and which do not ensure achieving the energy performance required to obtain the grant.

In the event that in the course of the reconstruction process, the recipient of the grant wishes to amend the main project, the recipient of the grant is obligated to present the final beneficiary with an expert evaluation in case of amending the main project, certifying the conformity of the amended main project and the energy calculations performed pursuant to the amended main project with the volume, quality and energy-efficiency of reconstruction works required to obtain the grant.

  • The application must be submitted digitally, having been signed by the person authorised to represent the applicant (manager of the apartment association). Communication of the documents related to granting the aid may take place either via e-mail or via the register of structural support;
  • an energy performance certificate based on the measured energy consumption of the apartment building (according to the requirements presented here), prepared from 3 May 2013;
  • a construction project that is at least in the preliminary project stage, or a main project in case of thorough reconstruction, and the energy calculation certifying the energy efficiency in a format approved by KredEx or as a simulated calculation;
  • the notification of an economic activity or confirmation from the undertaking which prepared the main project, pursuant to the Building Code, regarding the legal relationship between the undertaking and a competent person acting in the interests of the undertaking;
  • in the case of an applicant that is an apartment association the minutes of a decision of the general meeting in which the decision on the performance of the reconstruction works has been fixed; a description of the reconstruction works and the accompanying services; if necessary, the decision to take out a renovation loan in order to implement the project, and the maximum possible amount of the loan;
  • in the case of an applicant that is a local authority, an act, in which the decision on the performance of the reconstruction works has been fixed; a description of the reconstruction works and the accompanying services; if necessary, the decision to take out a renovation loan in order to implement the project, and the maximum possible amount of the loan;
  • price offers taken when ordering the services of a technical consultant together with the invitation to tender and the contract for the provision of the services of a technical consultant concluded with the successful tenderer;
  • in the case of an applicant that is an apartment association, a list of the members of the apartment association, which is no more than 30 calendar days earlier than the date the application was submitted to the final beneficiary;
  • where applicable, the price offers taken for the site investigations and the audit of the construction work, together with the invitation to tender and the contract concluded with the successful tenderer;
  • the price offers taken when ordering design work, along with the invitation to tender and the contract concluded with the successful tenderer.

 

Within two months of making the decision to satisfy the application, the recipient of the grant is obligated to present KredEx with the main project and the energy calculation certifying the energy efficiency in a format approved by KredEx or as a simulated calculation, and the positive decision of the renovation loan.

The recipient of the grant is not allowed to commence reconstruction works before the expert evaluation of the project confirms the main project’s conformity to the requirements or the applicant upgrades the main project pursuant to the guidelines of the expert evaluation, and the expert evaluation conducted after that confirms the conformity of the main project.

If the recipient of the grant has performed the ordering of reconstruction works before expert evaluation of the project, but according to the project, the main project must be significantly amended or updated, the recipient of the grant is required to organise a new ordering of reconstruction works pursuant to the updated main project.

Upon applying for the grant, SA KredEx will organise the initial expert evaluation of the main project and energy calculations. The grant will only be allocated in case the conducted expert evaluation confirms the conformity of the project to the requirements of applicable legislation.

  • Upon ordering reconstruction works, the recipient of the grant will conduct a procurement electronically in the Public Procurement Register. Conducting of the procurement shall be guided by the general principles of public procurement set out in § 3 of the Public Procurement Act, and instructional material. The obligation to use the Public Procurement Register is not applicable to the ordering of partial reconstruction works by a recipient of the grant who is an apartment association.
  • When ordering design works, a construction survey, a building audit, the technical consultant, and the owner supervision and technical building system maintenance service, price offers shall be taken from at least three enterprises that are independent of one another. The invitation to tender must include the criteria for selecting the successful tender. The tenders must be transparent, comparable and verifiable.
  • All price offers taken for ordering a service, item or construction work must be submitted to SA KredEx in a way that they are signed by the offering party.
  • The invitation to tender and submission of tenders and communication related to taking price offers shall take place in electronic form. All invitations to tender communicated to tenderers for ordering a service or item shall be presented to SA KredEx. The invitation to tender submitted to the tenderer by the recipient of the grant or the technical consultant offering a service to them must unambiguously include the time of communicating the invitation to tender, the item or service that a tender is sought for, the recipient of the invitation to tender, and the sender of the invitation to tender. The invitation to tender e-mail must be submitted in a way that all documents communicated to the tenderer with the invitation to tender are attached to the e-mail.
  • The selected price offer must be based on the best possible ratio of price and quality.
  • In case the volume of work changes in the implementation of the project, the respective change must be fixed in writing, and reasons for the change and other important circumstances must be described.

 

Please note that when taking price offers, it must be observed that the undertaking operates in the respective field in which they are asked for a price offer.

The abovementioned requirements with the helpful content do not amend or exclude the requirements set out for price offers in the regulation governing the apartment building reconstruction grant.

List of technical consultants
(we will update on a running basis)

Using the services of a technical consultant is not required for partial reconstruction.

The cost of the service of a technical consultant may be eligible for aid even before the date of submitting the application to the final beneficiary. Only such a technical consultant who has been entered into the respective list may be used in the implementation of a supported project.

The technical consultant advises the recipient of the grant in preparing the budgets of design and construction works, conducting the design and construction procurements, preparing timetables and conducting other necessary processes. The main task of a technical consultant is to advise an apartment association in technical issues primarily before reconstruction has commenced, but also in later in the process. The content and volume of the service ordered from the consultant is up to the apartment association.

1) A technical consultant may be a natural person who has completed competence training on the reconstruction of apartment buildings based on a study module approved by the Ministry of Economic Affairs and Communications, and has successfully passed the examination certifying the completion of the training.

2) The technical consultant provides their service under a written contract that has been concluded between the applicant and the technical consultant, or between the applicant and an enterprise through which the technical consultant provides their service. The technical consultant may also operate as a self-employed person.

3) The technical consultant must offer an independent service. They may not have economic interests in enterprises from whom the price offers for design or reconstruction works are taken, and who perform the aforementioned works, and from whom price offers are taken for the performance of owner supervision, except in the case the technical consultant operates as a person specified in clause 21 (1) 1) of the Building Code at the enterprise performing owner supervision. A technical consultant may not belong to the governing bodies of a legal person operating as a manager of the apartment association, or operate in contractual relationships with a legal person operating as a manager of the apartment association, or be the building manager appointed by the manager of the apartment association applying for the grant.

4) The applicant is required to choose a technical consultant only from the list published on the website of SA KredEx.

5) The technical consultant shall have the following tasks, in part or in full, pursuant to the contract to be concluded between the recipient of the grant and the consultant:

  • preparation of ordering the design works of the construction project (at least in the main project stage) and conducting procurement for designing. When preparing the terms of reference for ordering a project, you can be guided by the following example, if you’d like: terms of reference and volume of contracting of the project;
  • consultation in concluding a contract with the authors of the construction project;
  • coordination of design works and expert evaluation;
  • preparation of construction procurements and conducting procurements and the related consultation;
  • consultation in concluding a contract with the contractor of construction services;
  • consultation of the preparation and assembly of the documentation for the grant, and preparation thereof;
  • coordination of reconstruction works;
  • inspection of conformity of acts and invoices submitted by performers of reconstructions works to contracts concluded, performance and volume of works;
  • if the respective competence exists, they may also perform owner supervision;
  • organising inspections of the warranty period, and consultation in accepting warranty works.

You can get acquainted with a sample contract concluded with a technical consultant here. This is not a compulsory format, and the parties may amend the contract and use only parts thereof.

KredEx disburses the grant or makes the final disbursement on the basis of the act certifying the completion of reconstruction works and on the condition that implementation of the project activities has been certified.

The grant will be disbursed pursuant to the actual costs on the basis of the application for payment. Expenses must be certified by means of invoices, instruments of receipt of work, and contracts.

The recipient of the grant may apply for the disbursement of the grant in two parts. The recipient of the grant is entitled to submit the first application for partial payment of the grant, if at least 80% of the total volume of reconstruction works has been accepted; at that, the second disbursement, i.e., the final disbursement of the grant may not be smaller than 15% of the total volume of reconstruction works. A partial disbursement shall be made based on the instruments of receipt of works and invoices, and the second disbursement will be made after the implementation and receipt of all project activities, and submission of the request for payment.

The grant shall be disbursed pursuant to the proportion of eligible costs indicated in the decision to satisfy the application, and in the extent up to the amount specified in this decision. In the event that the cost of reconstruction works turns out to be cheaper than the amount specified in the application, the grant will be disbursed pursuant to the percentage specified in the grant decision, guided by the actual cost of the project.

To obtain the disbursement, the recipient of the grant must submit the following via e-mail:

  • the request for payment on the relevant form (PDF file able to be filled in. Please Note! Please use Acrobat Reader to fill in the form. The form cannot be filled in using the Windows 10 Edge browser. Please save the PDF file on the hard disk of your computer first, and then fill it in using Acrobat Reader)
  • contracts for construction or services
  • formal records of delivery and receipt for the works
  • invoices
  • payment orders or account statement
  • a report on surveying the air flow rates of ventilation systems that corresponds to generally accepted methodology
  • a report on the balancing of the heating system, which must also be presented in case the heating system was reconstructed beforehand, and the heating system was not updated with works performed within the reconstruction grant
  • in the presence of a gas appliance in the apartment, an audit of the gas installation
  • photos of the reconstructed apartment building and technical building systems
  • an excerpt of the ledger for differentiating eligible expenses related to the project from other expenses

The recipient of the grant is obligated to present the energy performance certificate based on the energy consumption data of the calendar year coming after the year following the implementation of the project, in the format specified by the final beneficiary, within one month of the respective calendar year ending.

Awarding the apartment building reconstruction grant has taken place since the 2019 grant round, on the basis of the 4 April 2019 Minister of Entrepreneurship and Information Technology Regulation No. 24 “The conditions and procedure of reconstructing apartment buildings”.

Pursuant to § 28 of this Regulation, the recipient of the grant must conduct the ordering of reconstruction works electronically in the Public Procurement Register, and in conducting the procurement, they are obligated to be guided by the general principles of public procurement established in § 3 of the Public Procurement Act. Foundation KredEx has prepared guidance material and the supporting documents necessary to conduct the procurement for recipients of the grant.

In the procurement of the apartment building reconstruction project and other services, the recipient of the grant must be guided by § 29 of the aforementioned Regulation, unless the Regulation provides an exception. Foundation KredEx has prepared guidance material and the supporting documents necessary to take conforming offers for design works (excluding the technical specification) for recipients of the grant. For procurements of design works and services, which the recipient of the grant orders based on § 29 of the Regulation, it is possible to find explanations of the general principles of the Public Act also from the guidance material published in the reconstruction works subsection.

Materials of reconstruction work procurements

Design work procurement materials

Contact us

Kaimo Kalda
Client Manager
kaimo.kalda [at] kredex.ee
Heikki Parve
Energy Efficiency Project Manager
heikki.parve [at] kredex.ee
Kalle Kuusk
Buildings' energy efficiency project manager
kalle.kuusk [at] kredex.ee