Following an unprecedented crisis due to the pandemic, Lithuania’s recovery and resilience plan responds to the urgent need of fostering a strong recovery and making Lithuania ready for the future. The reforms and investments in the plan will help Lithuania become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 30 measures, covering investments and reforms. They will be supported by €2.22 billion in grants; 37.8% of the plan will support climate objectives and 31.5% 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 reforms and investments have to be implemented within an ambitious timeframe, as the Regulation on the Recovery and Resilience Facility stipulates that they have to be completed by August 2026.
The plan will foster economic growth and create jobs. These estimates do not include the possible positive impact of structural reforms, which can be substantial.It is estimated to lift Lithuania’s gross domestic product by 1.0-1.6% by 2026. This boost to the economy will bring up to 9000 citizens into jobs. Lithuania will benefit significantly from the Recovery and Resilience Plans of other Member States too, for instance through exports. These spill-over effects are estimated to account for 0.5% of gross domestic product in 2026. This demonstrates the added value of joint and coordinated action at the European level.
Impact of NextGenerationEU on Lithuania's gross domestic product by 2026
Jobs by 2026
Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026
When designing the plan, the Lithuanian authorities consulted social partners and stakeholders at national and regional level, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 14 May 2021. On 2 July 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen visited Vilnius and met Gitanas Nausėda, President of Lithuania and Ingrida Šimonytė, Lithuanian Prime Minister. The plan was in turn adopted by the Council on 20 July opening the door to its implementation and financing.
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 €218 million in energy efficiency renovations of buildings in order to foster a sustainable urban environment and €242 million in generation and storage of renewable energy. Furthermore, €347 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.
Example project: Construction of onshore renewable energy plants (solar and wind power) and individual storage facilities
The objective of this measure is to provide support for the renewable energy production and storage installations and for connecting renewable energy communities. It includes support provided to legal entities, farmers and renewable energy communities for the acquisition and installation of onshore solar and wind power plants and storage, prioritising self-consumption, farm or economic needs. The recipients of the support have the possibility to sell electricity back to the electricity grid. As a result of the investment, at least 302 MW of additional electricity generation capacity from renewable energy sources, and at least 15.2 MWh of individual electricity storage facilities will be created.
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(€117 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. Furthermore, 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 €117 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.
Example project: Development of Lithuanian-language technological resources
The measure aims to develop technological Lithuanian language resources for AI solutions that will be made available free of charge to the public.
The investment of €35 million includes the development of language resources that will allow scientific and business organisations to improve AI systems and services for the Lithuanian language. It will contribute also to the development of digital resources that support the preservation and vitality of the Lithuanian language (e.g. adapting Lithuanian language heritage to scientific, cultural and educational needs, optimising language research) and the development of specialised knowledge resources, including ontologies, and international language resources.
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 be 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 withreforms 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 (€65 million).
Example project: Modernisation of centres of expertise in the cluster of infectious diseases
The measure supports the modernisation and expansion of the centres of excellence of the cluster of infectious diseases in five hospitals located in major cities, including Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys and their adaptation to emergency and crisis situations. Investments include renovation, adaptation and refurbishment of premises as well as the procurement of medical and laboratory equipment to ensure affordable, high-quality and safe diagnostic and treatment services for infectious diseases. Overall, investments in hospital infrastructure will help to reorganise the ambulance services to ensure that the necessary and timely medical assistance is provided to the population.
The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)