Municipalities that invest in projects funded by the European Union Structural Funds which also enable them to save their budget costs and increase their revenues, as of 1 June 2016 can receive grants from the state budget to ensure their own contribution. To this end, they can submit applications to VIPA which administers such grants.
In accordance with Paragraph 2 of Resolution No. 1326 of the Government of the Republic of Lithuania of 26 November 2014 “On the Approval of Supplement to the Action Programme on Investments of the 2014-2020 European Union Funds”, municipalities must make sure that they will cover up to 15% of project eligible costs at their own expense. It is anticipated that municipalities will need about EUR 14 million to fund projects in 2016, and the total estimated amount of municipalities’ own contribution according to the priorities of the 2014–2020 Action Programme will be EUR 119 million.
By means of the Republic of Lithuania Constitutional Law on the Implementation of the Fiscal Compact and the Republic of Lithuania Law on the Approval of Financial Indicators of the 2017 State Budget and Municipal Budgets the possibilities for municipalities to borrow were restricted by the established lending and borrowing limits, in certain cases municipalities might not have funds to ensure their contribution to projects.
To ensure the implementation of the projects planned by municipalities according to the Action Programme, as well as reaching the goals and tasks and the determined indicators provided for in the Action Programme in a timely manner, a financial instrument funded from the state budget was developed, namely, funding of municipalities by awarding grants.
The instrument is aimed at ensuring own contribution of municipalities according to the 2014-2020 Operational Programme for the European Union Funds' Investments implemented using allocations of the European Union Funds for jointly funded projects by awarding grants in those cases when municipalities have no capacity to fund projects themselves because in this way they would exceed the limits in the amount of allocations and the limits of lending and borrowing imposed on to them.
Taking into consideration the fact that not all municipalities would require grants, it is estimated that the awarding of grants in 2017 would require no more than EUR 7 million which are specified in the programme administered by the Ministry of Finance of the Republic of Lithuania “Ensuring the Implementation of the Programmes and Projects Using the Assistance of the European Union and Other International Financial Support”. Later the amount of funds would depend on the limits of lending and borrowing set for municipalities in a corresponding year, the actual debts of municipalities and the scope of implemented projects.
For more details contact: Vaida Lauruševičienė, tel. +370 5 203 4 890 v.lauruseviciene@vipa.lt