Apartment associations to once again receive grants to reconstruct buildings

On Friday, 27 March, the regulation on the grants for reconstruction of apartment buildings will enter into force, and apartment associations and local governments will have the possibility to receive more support from the state for repairing apartment buildings and reducing energy expenses. The volume of the grant to be funded from the Cohesion Fund is EUR 102 million, which will allow for the reconstruction of an estimated 1,000 apartment buildings. This is the first support measure of the European Union’s funding period for 2014-2020 in the field of energy efficiency.

The grant is aimed at achieving energy efficiency and better internal climate in existing apartment buildings and facilitating the implementation of renewable energy. The grant helps to reduce the energy expenses of households, extend the lifetime of buildings, and improve the general living environment.

Grants for the reconstruction works will be allocated in three proportions – 15%, 25% and 40% of the cost of the works; the proportion depends on the level of energy saving to be achieved and the works to be done. As an exception, the grant volume allocated for the apartment buildings located in Ida-Viru County will be 10% higher due to the number and condition of the buildings in this region.

According to Minister of Economic Affairs and Infrastructure Urve Palo, the state will assume a growing role to help improve the living environment of people, a natural part of which is an insulated home with a better internal climate. “In addition to improving the living environment of 40,000 families, the reconstruction of apartment buildings will contribute to the growth of the construction sector, providing work for many people domestically,” she added.

If currently, for example, a family pays an average of EUR 100 per month on heating annually, then the full reconstruction of the building will reduce this amount down to about EUR 50. “The remaining EUR 50 will of course, to some extent, fund the bank loan taken for performing the works, but the building will be in good shape, its value higher and in the next 10-20 years, there will be no need for any additional large investments for repairing the building. In buildings like this, the quality of life will definitely be much better.”

Housing stock surveys have shown that in addition to energy efficiency issues, the internal climate of the existing apartment buildings does not comply with modern requirements. The energy efficiency of a building and the quality of its internal climate are closely interrelated, and when improving the energy efficiency, it must be observed that this would not deteriorate the internal climate. Therefore, for all grant volumes, ventilation systems need to be reconstructed so as to ensure good internal climate, which in turn will significantly reduce the health risks for people.

To be eligible for the 15% grant, the apartment building applying for the grant must undertake reconstruction work that will increase energy efficiency, to achieve an estimated energy saving of least 20% on the consumption of heat energy.

To be eligible for the 25% grant, the apartment building applying for the grant must reconstruct the central heating system of the building, fully insulate and reconstruct the outer walls of the building, replace all windows yet to be replaced at the beginning of the project with triple glazed energy-efficient windows, and insulate and reconstruct the roof of the apartment building. The above works must result in a class D energy efficiency rating for the apartment building.

To be eligible for the 40% grant, the apartment building applying for the grant must achieve at least a class C rating for energy efficiency as a result of the reconstruction works. To achieve this, all works required for receiving the 25% grant need to be performed and, in addition, windows must be installed level with the insulation or window jambs provided with extra insulation, and the ventilation system of the building must be equipped with a thermal energy storage unit.

“Both the state and the reconstructor, that is, the apartment building, should be interested in making the large investment serve its purpose. In the new funding period, an opportunity has been provided to use the services of a technical consultant who will advise on projects that are eligible for the 25% and 40% grants. The technical consultant will help the apartment buildings in the performance of reconstruction works, closely cooperate with the management board of the apartment association, and offer advice on making the best and most cost-efficient choices. Also, the projects of the apartment buildings applying for grants of 25% and 40% will undergo an expert assessment aimed at guaranteeing compliance of the reconstruction project with the applicable standards and the best architectural, constructive, technical and technological solutions,” said Triin Reinsalu, head of the housing and energy efficiency division at KredEx.

In applying for the grant, exceptions have been provided for those apartment buildings on which heritage conservation or cultural value restrictions have been imposed, as a result of which these buildings are unable to meet all of the technical requirements. In addition to reconstruction works, the preparation of audits and construction projects, and the services of technical consultancy and owner supervision will be supported.

The grant is aimed at those apartment buildings built before 1993, in which an apartment association has been formed, or which are fully owned by the local government. The buildings must comprise at least three apartments.

KredEx will announce the application round and accept applications starting on 1 April. Specific terms and conditions for applying are available on the KredEx website; the regulation has been published in the State Gazette.