Lithuania’s recovery and resilience plan

RRF FUNDED PROJECTS IN LITHUANIA

WHAT’S IN THE PLAN?

The reforms and investments in Lithuania’s plan, approved by Council on 28 July 2021, are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition. Following Council approval of Lithuania’s plan on 28 July 2021, Lithuania’s updated recovery and resilience plan, including a REPowerEU chapter, was approved on 9 November 2023.

• 48 measures, covering investments and reforms
• 37.4% of the plan will support climate objectives
• 23.3% of the plan will foster the digital transition

The transformative impact of Lithuania’s plan is the result of a strong combination of reforms and investments which address the specific challenges of Lithuania. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to address common European challenges by embracing the green and digital transition, to strengthen economic and social resilience and the cohesion of the Single Market. In particular, Lithuania’s plan will accelerate reforms and investments in education as well as healthcare. The plan will also invest in more sustainable power generation and energy storage, promote green mobility, facilitate the 5G rollout and strengthen social protection.

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

REPowerEU measures in Lithuania’s plan

Lithuania’s plan now includes additional reforms and investments to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives. To finance this increased ambition, Lithuania has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €4.7 million. These funds have been added to Lithuania's REPowerEU grant of €194 million.

Key measures for REPowerEU

The REPowerEU measures include one reform and three investments. The reform will facilitate the issuance of permits for renewable energy development, while the investments will accelerate the renovation of private buildings by financially supporting households, including through fully covered technical assistance expenses. New investments will also cover loans that will be provided to businesses and public entities to increase solar or wind electricity generation capacity. Support for the purchase of clean-energy boats will allow climate-friendly cargo transport between the river port of Kaunas and the seaport of Klaipėda.

Together, these measures are expected to increase Lithuania’s share of renewable energy and accelerate decarbonisation of energy generation, building and transport sectors.

Green transition

In the area of climate and environmental policies, Lithuania faces challenges related to the low share of renewables in the energy mix, the need for significant improvements in the energy and resource efficiency of the construction, transport and industry sectors, for reduction of the overall environmental footprint and promoting sustainable innovation, including through adequate measures on green skills. Finally, the circular economy, air and water quality and biodiversity also need to be improved.

Key measures for the green transition

• The plan supports the green transition through reforms and investments of €307 million in energy efficiency renovations of buildings in order to foster a sustainable urban environment and €762 million in generation and storage of renewable energy.
• €335 million will be invested in sustainable mobility supporting the replacement of polluting road transport vehicles, improving public transport services, establishment of charging/refilling infrastructure for vehicles using alternative fuels, and developing alternative fuels sectors (biomethane, second generation liquid biofuels, hydrogen).
• The plan also supports the restoration of degraded peatlands (€16 million) and increased resource efficiency through the adoption of the Circular Economy Action Plan.

Digital transition

Digital challenges for Lithuania include the delayed deployment of 5G, a persistent and significant urban-rural digital divide in terms of broadband infrastructure, low levels of digital skills and a lack of ICT specialists, and limited digitalisation and uptake of advanced technologies across the Lithuanian SMEs and start-ups.

Key measures for the digital transition

• Lithuania’s recovery and resilience plan supports the digital transition with reforms and investments of €73 million in connectivity to further develop the rollout of very high-capacity networks, including 5G and fibre infrastructure in rural and remote areas.
• The plan also includes substantial reforms and investments to digitalise the public sector (€282 million), to promote digital skills for children, employees, civil servants and senior citizens, and to address the shortage of IT employees in the labour market.
• The plan includes reforms and investments in the take-up of advanced digital technologies in the private sector, particularly regarding science-business cooperation for innovative technologies and the digitalisation of the cultural sector. In particular, the plan invests €103 million in developing innovative tools, including tailored for the Lithuanian language, allowing universal access to digital resources and enabling scientific and business communities to develop innovative technologies, services and products.

Economic and social resilience

Key macro-economic challenges for the Lithuanian economy include the need to improve tax compliance and broaden the tax base to sources less detrimental to growth and the need to address income inequality, poverty and social exclusion, including by improving the design of the tax and benefit system. Furthermore, the quality and efficiency of education and training, including adult learning as well as the quality, affordability and efficiency of the healthcare system needs to be further improved. The focus on investment-related economic policy on innovation should be stronger and productivity growth should be stimulated by improving the efficiency of public investment.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience with reforms and investments aimed at improving the resilience, quality, affordability of the healthcare system. Measures will focus on modernising the infrastructure of healthcare facilities, developing five centres of expertise in infectious diseases, and investing in the digitalisation of the health system (€268 million).
• The plan includes measures to ensure high quality accessible lifelong education through consolidating teaching and learning resources, improving preschool, primary and secondary education, vocational education and training (VET) and adult learning (€312 million).
• It also supports higher education and support for innovation by changing the funding model of the higher education system and making research and innovation support policies more efficient by consolidating existing agencies (€200 million).
• In its plan, Lithuania also focuses on stronger social protection by reforming a guaranteed minimum income protection scheme, increasing coverage of unemployment social insurance as well as investing in a more customer-oriented employment, training and entrepreneurship support focusing on the twin transition (€109 million).
• The plan includes reforms and investments in increasing the efficiency of the public sector, namely improvements in tax compliance and broadening the tax base, enhancing the budgetary framework, and improving human resources management in the public sector (€63 million).

ANNUAL EVENTS

Annual events facilitate the exchange of views on the state of implementation of the Recovery and resilience plans, while ensuring close cooperation between all stakeholders and providing a platform to discuss interlinks between the Plans and other Union programmes. 

More information on Annual events held in Lithuania can be found here

EUROPEAN SEMESTER

Lithuania’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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