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EUR 4.5 million saved with the reconstruction grants for apartement buildings

05.09.2014

An analysis of the condition of the housing stock and the effect of the reconstruction grants, conducted by KredEx, showed that with the help of KredEX’ reconstruction grants, apartment associations have invested a total of EUR 151.4 million into the renovation of apartment buildings. Investments made into apartment buildings are large-scale and dependent on state grants for the reconstruction projects.

From 2010 to 2014, KredEx has allocated grants in a total amount of EUR 37.7 million. KredEx has helped to renovate 663 apartment buildings with a total closed net area of 1.9 million square metres, which is 9.7% of the total heated area of all the apartment buildings erected in Estonia before 1991.

“As most of the apartment buildings in Estonia date back to the Soviet era, the largest issue the Estonian housing stock is facing is the high energy consumption of buildings, which, due to the heating cost, has a significant effect on the financial situation of households. Most of the households in Estonia are living in apartment buildings and as their reconstruction makes it possible to conserve heating energy, then it is a way to significantly decrease housing expenses,” said Triin Reinsalu, head of the housing and energy efficiency division at KredEx.

As a result of the continuous allocation of apartment building reconstruction grants, people have become better informed and consequently the number of fully renovated apartment buildings has been increasing through the years. When in 2010 only one apartment building (3% of the houses that received the grant) was renovated with a 35% grant, the year 2013 ended with 62 houses being fully reconstructed (61% of the houses that received the grant).

The greatest number of applications for renovation grants were submitted in Harju County and Tartu County, while the least applications came from Hiiu County and Võru County (table with the figures attached). The analysis also showed that the decision to proceed with reconstruction works was influenced mostly by the price of heating and the household income.

It is estimated that as a result of the renovation works the apartment buildings have managed to save 43% of energy. In practice it means that the combined stock of apartment buildings reconstructed by the end of 2013 save an average of 60 GWh of heating energy, which is estimated to be equal to the total amount of heating energy used yearly by the heating network of the town of Haapsalu. Given that the price of heating is EUR 75/MWh, it means that EUR 4.5 million was saved in a year.

The analysis is published on the web page of KredEx at www.kredex.ee.

Grants for the reconstruction of apartment buildings were allocated from the funds Estonia received from the sales of the state’s pollution quotas to Luxembourg. It was possible to apply for a reconstruction grant of 15%, 25% or 35% of the total cost of the project depending on the extent of the reconstruction done on the apartment building.